The standard financial statements are helpful in managing your business, but they are just the beginning of the true Health of your business. To find the rest of the story, dig deeper. Grace Performance, Cost and Strategy can help you discover the true health of your company. Requst a proposal.

Check all that you are familiar with, then read below for more information.

The Balance Sheet, Income Statement, Cash Flow Statement and Statement of Owner's Equity do not show the whole truth about the health of your business. For that you need to explore the relationships between the values on these reports. In addition, these ratios are best interpreted when compared with other periods to reveal consistency or hidden trends. These ratios give you information about your company's Liquidity, Solvency, Leverage, Profitability, and Operating Activity and Performance.

If you are not familiar with these terms, here is a quick summary and how they affect your business:

LIquidity: ability to quickly convert assets into cash to meet short-term liabilities. Important for being able to fulfill your promises to paying employees on time, being able to buy inventory when needed to meet your customers' buying demands and to be able to pay expenses when due.

Solvency: ability to meet your long-term fiinancial commitments. This is very important when trying to get a loan or investors and when making decisions about whether to grow your business. Being solvent also helps your business survive economic downturns and protect your reputation as a trustworthy company.

Leverage: creating higher returns on a project, investment or growth by strategically using external resources, typically financial in nature, such as borrowing to buy a new production facility.

Profitability: ability to earn a satisfactory profit and return on investment. This extends to how well assets are being managed to generate income.

Operating Performance: use of assets to generate revenue. This includes how efficiently your customer accounts are being collected and how well your inventory is being managed.

Grace Performance, Cost and Strategy can help you discover the true health of your company. Requst a proposal.