16th Mar 2010
Preparing for Financial Changes in an Ever Changing Economy
March 15, 2010
In today’s economic climate, it is critical for executive managers to review financial statements on a consistent and timely basis. It is much easier to react to an unexpected change in financial position when information is current and accurate than when it is several months old.
Owners and executive managers should review a basic financial packet regularly, ideally every month. In extremely volatile climates, weekly flash reports are also a good way to keep management apprised of current financial information. While financial information varies from industry to industry, packets should include at least:
· Management Discussion and Analysis
· Executive Summary
· Balance Sheet
· Profit and Loss Statement
Packets may also contain:
· Comparative statements
· Cash flow statement
· Actual results compared to budget
· Covenant calculations
· Financial ratio analysis
· Projected results.
Reports need to be brief enough to allow a good review of the current situation but thorough enough to report the transactions and financial position of the company.