The availability of your annual financials is a wonderful opportunity to review your business performance. You can discover how to improve your business as well as refresh your enthusiasm and drive in the business. Here are seven ways you can use your annual financials to improve your business.
Your sales figure is a veritable goldmine of information about your business. The increase or decrease over the previous year doesn’t tell you much, so drill down further and work out the reason for the change.
For example, your sales may have increased because you cut your prices, but you may be no better off. Say your gross profit margin is 35 percent and you reduce your prices by 10 percent; your turnover has to increase by 40 percent just to maintain profit levels.