Northern Accountants

5. Analyse

Simplify statutory accounts to understand key areas of performance

You can only really judge performance by comparing it to:

  • Targets
  • Previous months and years
  • Competitors in your industry

Your management accounts and OnePage Plan from Step 3 will enable you to compare your monthly performance to your targets and the previous 12 months. The Confidential Performance Report in Step 5 will show you how you compare against others in your industry.

The aim of Step 4 is to identify and analyse the underlying trends in your business over the last five years. The key trends that successful businesses focus on include:

  • Profit and loss account trends - such as sales, margins, profit drivers, productivity, net profit and the breakeven point
  • Balance sheet trends - such as liquidity, debtor days and stock turnover
  • Trends in key ratios - such as gearing and return on investment

How Northern Accountants help you:

Conduct a Financial Performance Review to produce a report that:

  • Identifies trends in all your key numbers and ratios over the last 5 years
  • Presents the findings in easy to read graphs
  • Contains a ‘plain English’ explanation of what it all means
  • Details a sensitivity analysis, calculated to show how much more successful and profitable you could be

The analysis is presented to you in an executive summary report, providing valuable insights into the progress and outlook of your business, and where you should be concentrating your efforts. The length of the report is up to you – opt for a standard 8-10 page document, or choose a more comprehensive report that develops the points further.

The Financial Performance Review shows me in a simple and plain English format how my business has performed over the past 5 years. It made for interesting reading and allowed me to build on the success of the past.
Dave Cataroche Beyond Flooring Ltd

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