Category Archives: Understanding Financial Statements

Give Finance some love

For most of the US, taxes were due last week. For most counties in California, all returns AND tax payments have been delayed until October. Yay for us, not so good for the tax preparers come September. So let’s give Finance some love now. >

Cash is king

You’ve heard this before haven’t you? When it comes down to starting a business or surviving as a business – cash is king. Do you and your team do all the tricks and tweaks needed to make enough profit to keep you alive? Think of it like your own health. When you are feeling healthy life is good. Cash is the health of your company. And, like your own health, there are steps you can take to make it better. >

How much do your employees think you earn?

We make all sorts of assumptions about how much employees understand about our business and they make all sorts of assumptions about where the money is going that aren’t based on reality. I’d say it is time for some real conversations. Pull back the curtain. >

How gross IS your margin?

This is my personal favorite. I love studying gross margin. I want to know what your competitor’s gross margin is. I want to know why the margins are better in industries other than yours. I want to know how come some companies have gross margins over 50%. (I came out of manufacturing, so that looks like nirvana to me). If you are at 50%, how do you get to 60%? >

Can I top your top line?

Last week I talked in a general way about where business leaders focus their attention – top line v.s. bottom line. Since the business focus follows the focus of the leader, there are specific areas that leaders should understand well. If these metrics are off, you need to be paying close attention and know how to address them. >