General

The most important formulas to calculate the most important indicators of financial analysis for your business

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Manage the financial situation of your company and spot problems Manage relations with partners who finance the company’s operations (banks and

owners of securities for debt as well as other creditors that aren’t customers and suppliers) Establish limitations (limits) for the plan and in actual

activities; decide on the borrowing of funds, as well as the terms and conditions for their participation and regulate the relationships with contractors

and suppliers customers, buyers and suppliers in the moment Who is accountable for financial analysis? All data that is used to prepare financial

statements is gathered by the financial-economic services. Based on how big your business and the structure, you need to request details on financial

analysis from your financial director or deputy director of finance and economics and finance, chief financial manager, accountant. Indirectly , the

leaders of the key departments (production sales, IT, and production) are also accountable for the financial health of the company. It is therefore

recommended to ask these employees to examine the financial performance of the business you run. It is not advisable to conduct the financial

analysis of your business on your own.

 

In order to do that, you need an economic and financial service where employees are compensated for their

job. Your job is to demand repeatedly, then demand! From the finance department and timely reports from other departments – to complete their

tasks in a timely manner. The CEO’s financial analysis can be done using the 3P formula that is: Invite the person responsible to demand the

necessary documentation – Identify the issue and the root of any issues. The sources of indicators for Financial Analysis The most important sources

of information needed to analyze the financials of a business include the balance sheets (major items of liabilities and assets in the final hours of each

day) and the cash flow statement (cash outflows and inflows for important items, with information on significant payments or customers). Financial

analysts must give you monthly or even weekly reports on revenue and profits as well as accounts payable and receivable as well as the status of loans

and delayed payments (if there are any) and the condition on working capital. How can a general manager devote 15 minutes each week on analysis of

financials to prevent financial issues, you can plan your finances on the basis of a weekly basis. Instead of having to wait for reports from the

accounting department, you will be able to control expenses, and more important, you will have a tool to help you make forecasts for the future. In

order to do this, you have to establish goals for your activities and monitor the deviations from them and this process takes less than 15 minutes per

week.

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