A few weeks ago we covered margins, all flavors and types. Many of you asked whether there are more financial metrics you should be using to make decisions? The answer is absolutely! We’ll cover some this week.
Before we do that, remember that I’m not an accountant and so we won’t cover specific accounting techniques and financial governance. Instead, we’ll focus on tools that help you understand how your decisions affect the flow of cash in your business. Most of these tools focus on effective planning, to make sure your business always stays solvent.
Since we’ll be using these financial analysis tools to plan for the future, remember that the future is always changing. No matter what your projections, always apply a safety factor to account for unforeseen problems that may arise along the way.
Tomorrow we’ll get started by talking about Break-even Analysis, also known as planning for profits!
Quote of the day: “Show me the money!” – Jerry Macguire