I will make the case for keeping accounts current and useful. From the accountants point of view, keeping accounts current is essential and useful for monitoring the health of your business.
My experience tells me that small business owners are prone to being unaware of the health of their business. In many cases, accounts are not up to date, and only posted just before the extended due date of the tax return.
Math based tools are brutally honest. Models will inform you as to the health of your enterprise. I suggest that adopting between five to ten of the ratios I wrote about last month. For your consideration, here are useful statistics to monitor the health of your enterprise.
• Liquidity ratios report the ability to meet current obligations.
• Turn over ratios address efficiency of product ins & outs.
• Profitability Ratios.
• Leverage Ratios.
• Return in Equity.
• And many more.
A sage counselor once told me that the closely held business is the child that doesn’t talk back. Ratio analysis is the child that does talk back and should be listened to.
Contact David Hamblin for guidance and support needed to achieve your business goals.