Key financial reports and metrics for small business

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This slide deck presents some ideas that small businesses can implement right now to help them get a much better handle on their finances. Starting from the most basic metric (cash in the bank) and working through additional key performance indicators, these slides will help you better understand your business finances. QuickBooks can easily be used as the foundation for creating many of these small business financial indicators.

www.BetterBottomLine.com
Key Financial Reports and
Metrics for Small Business
Presented by:
Scott Gregory, Creator:
“Beyond QuickBooks: Making Sense of Your Numbers”

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Complete Slide Deck
is Available at
www.SlideShare.net
Search for QuickBooks

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Photo courtesy of EverystockPhoto.com – danperry.com

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Photo courtesy of Google Images

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Every business needs
a Scorecard
…otherwise, how do you know
how you’re doing?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building YOUR Scorecard
 Start simple
 Beware of paralysis by analysis
 Forget about the “tax” issues

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #1: Cash in the Bank
• Pros?
• Cons?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #2:
Cash in the Bank
+ A/R – A/P

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #2: A/R = ?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #2: A/P = ?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #2: Cash in the bank + A/R – A/P
• Pros?
• Cons?
• Common Problems?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #3: Profit Report
“How did we do”?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #3: Profit Report
• Understanding it?
• A major concern?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #3: Profit Report
• Income
• Cost of Goods (COGS)
• Expenses

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #3: Profit Report
• A major concern before
using this report is?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #3: Profit Report
• “But my tax guy gives
me this…”
• How often?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #4: Balance Sheet
• “What I Own…”
• Understanding it
• Assets, Liabilities,
Equity

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Metric #4: Balance Sheet
• Is the data right?
• How often?

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Taking it to the next level…
• A/R Turnover (how fast are you
collecting?):
Net Sales / Average A/R

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Taking it to the next level…
• Inventory Turnover (how fast are
you moving inventory?):
Cost of Goods Sold / Average
Inventory

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Taking it to the next level…
• Average Sale per Invoice
(excellent trending metric):
Total Sales $ / Total # of invoices

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Taking it to the next level…
• Gross Profit Margin:
Gross Profit $ / Total Sales

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
“MBA Level Stats”
Profitability by product line
Debt to equity
Labor ratios
Many others…

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your Scorecard
Create a “Dashboard” of
YOUR Key Metrics
Makes it easy to spot trends

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Building Your
Scorecard
Real Life
Dashboard
Example:

www.BetterBottomLine.com
Key Financial Reports and Metrics…
You do NOT have to be an
accountant to use a scoreboard for
your business*
* - however, you may need help initially to help ensure your
data is correct and your systems are working properly

www.BetterBottomLine.com
Key Financial Reports and Metrics…
Just like your pledge to deliver great
products or services….
Make a pledge to develop and
monitor your business scorecard!

www.BetterBottomLine.com
12 Things Every QuickBooks User…
Questions? Comments!
Scott Gregory
E-Mail: Scott@BetterBottomLine.com
Phone: (440) 527-5696
Web: www.BetterBottomLine.com

The document discusses various analytical techniques used to analyze financial reports and ratios, including ratio analysis, vertical analysis, horizontal analysis, and trend analysis. It then provides examples of key financial ratios used to evaluate the profitability, financial stability, and effectiveness of management for a business. These include ratios like gross profit ratio, net profit ratio, current ratio, quick ratio, equity ratio, and debt ratio. Recommendations are provided for improving areas of weakness identified by the ratios.

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Key financial reports and metrics for small business

1. www.BetterBottomLine.com Key Financial Reports and Metrics for Small Business Presented by: Scott Gregory, Creator: “Beyond QuickBooks: Making Sense of Your Numbers”

2. www.BetterBottomLine.com Key Financial Reports and Metrics… Complete Slide Deck is Available at www.SlideShare.net Search for QuickBooks

3. www.BetterBottomLine.com Key Financial Reports and Metrics… Photo courtesy of EverystockPhoto.com – danperry.com

4. www.BetterBottomLine.com Key Financial Reports and Metrics… Photo courtesy of Google Images

5. www.BetterBottomLine.com Key Financial Reports and Metrics… Photo courtesy of Google Images

6. www.BetterBottomLine.com Key Financial Reports and Metrics… Every business needs a Scorecard …otherwise, how do you know how you’re doing?

7. www.BetterBottomLine.com Key Financial Reports and Metrics… Building YOUR Scorecard  Start simple  Beware of paralysis by analysis  Forget about the “tax” issues

8. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #1: Cash in the Bank • Pros? • Cons?

9. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #2: Cash in the Bank + A/R – A/P

10. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #2: A/R = ?

11. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #2: A/P = ?

12. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #2: Cash in the bank + A/R – A/P • Pros? • Cons? • Common Problems?

13. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #3: Profit Report “How did we do”?

14. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #3: Profit Report • Understanding it? • A major concern?

15. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #3: Profit Report • Income • Cost of Goods (COGS) • Expenses

16. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #3: Profit Report • A major concern before using this report is?

17. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #3: Profit Report • “But my tax guy gives me this…” • How often?

18. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #4: Balance Sheet • “What I Own…” • Understanding it • Assets, Liabilities, Equity

19. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Metric #4: Balance Sheet • Is the data right? • How often?

20. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Taking it to the next level… • A/R Turnover (how fast are you collecting?): Net Sales / Average A/R

21. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Taking it to the next level… • Inventory Turnover (how fast are you moving inventory?): Cost of Goods Sold / Average Inventory

22. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Taking it to the next level… • Average Sale per Invoice (excellent trending metric): Total Sales $ / Total # of invoices

23. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Taking it to the next level… • Gross Profit Margin: Gross Profit $ / Total Sales

24. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard “MBA Level Stats” Profitability by product line Debt to equity Labor ratios Many others…

25. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Create a “Dashboard” of YOUR Key Metrics Makes it easy to spot trends

26. www.BetterBottomLine.com Key Financial Reports and Metrics… Building Your Scorecard Real Life Dashboard Example:

27. www.BetterBottomLine.com Key Financial Reports and Metrics… You do NOT have to be an accountant to use a scoreboard for your business* * - however, you may need help initially to help ensure your data is correct and your systems are working properly

28. www.BetterBottomLine.com Key Financial Reports and Metrics… Just like your pledge to deliver great products or services…. Make a pledge to develop and monitor your business scorecard!

29. www.BetterBottomLine.com 12 Things Every QuickBooks User… Questions? Comments! Scott Gregory E-Mail: Scott@BetterBottomLine.com Phone: (440) 527-5696 Web: www.BetterBottomLine.com

Key financial reports and metrics for small business

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