Financial analysis

The financial analysis of a company is a crucial part of every business venture. It analyses the financial health of a company – finds both strengths and weaknesses, evaluates its performance, assesses the success rate of given tasks and provides important feedback. Thanks to the FA you will be able to decide on the matters of financial management of the company more easily. Not only that, the FA may be a requirement when filing for a business loan, or it might be reuqired when filing for EU subsidies.

Business plan

The business, or enterpreneur/commercial plan is a structured document in which each individual, consecutive step is outlined (including the potential risks). These steps are what is required for your company to successfully develop. Rookie entrepreneurs will use it as a guide for developing their business goals, veteran businessmen will gather from it information important for future company development.

Proper business plan should include:

  1. getting acquainted with the bussiness aim or project-set goals
  2. product/service description + its customer benefits
  3. the customer’s profile to whom the product is intended, and where to find it
  4. how to acquire money from a customer
  5. budget + other resources (people, property)
  6. costs, revenues and profit plan
  7. the analysis of potential dangers, weaknesses and strengths

The result of every business plan should be the decision whether the given project has any chance of succeeding, how much will it cost and chiefly, how much money will it yield.

HOW TO ASSESS THE FINANCIAL HEALTH OF A COMPANY?

Why should you get to know the financial health of your company? There are many reasons, let us mention at least a few. It is good to know the difference between the real results of your management and the planned results. How your company fares finance-wise and why it is so. You can find the weak spots before they manage to complicate your life and gain useful foundations for the better management of you company.

An ideal tool for assessing the health of the company finances is the financial analysis. It is combined with the accounting that provides important information for financial decisions (balance sheets, profits and losses, cash-flow, etc.)

The important thing is to choose the right pointers and the method of their enumeration. With that your ordinary accounting statements will help. Next is the comparison of the acquired data with the competition, previous results and plans of your company. Last, but not least, the FA should unveil the mutual relationship between the particular pointers of the financial condition and their influence on the positive/negative company development.

And you should know where you are standing.