Main Financial Reports:

Income Statement –This particular report tells you how much money a company made (or lost) in a given time period. It does so by showing you revenues earned and expenses paid, with the ultimate goal of showing a company’s profit numbers.

Balance Sheet – This piece of financial reporting offers a snapshot of your assets and liabilities (aka debts) at a given moment in time. It’s definitely possible to fall into bother with your profitability and cash flow situations while having a healthy balance sheet (especially if you have a lot of money tied up in physical inventory), and this report will help you dig deeper, assisting your strategic decision-making. A balance sheet is a good overview of the assets and debts of your company at a specific moment.

Statement of Stockholders’ Equity – Often called the statement of changes in equity, one of the 5 general purpose financial statements and is the second financial statement prepared in the accounting cycle. This statement displays how equity changes from the beginning of an accounting period to the end.

The statement of stockholder’s equity displays all equity accounts that affect the ending equity balance including common stock, net income, paid in capital, and dividends. This in depth view of equity is best demonstrated in the expanded accounting equation.

In other words, the statement of stockholder’s equity is a basic reconciliation of how the ending equity is calculated. How did the equity balance on January 1 turn into the equity balance on December 31?

Statement Of Comprehensive Income – The statement of comprehensive income should be presented immediately after the income statement. The items which make up other comprehensive income include:

• Unrealized gains or losses on derivatives used in hedging
• Unrealized gains or losses on pension and postretirement liabilities
• Foreign currency translation adjustments

The amounts of these other comprehensive income adjustments (positive or negative) are not included in your net income, income statement, or retained earnings. Instead, the adjustments are reported as other comprehensive income on the Statement of Comprehensive Income and will be included in accumulated other comprehensive income.

Cash Flow Statement – illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income statement and balance sheet. The accounting profession realizes that reading only one or two financial statements is not sufficient for understanding a company’s finances and operations. Accordingly, the generally accepted accounting principles (GAAP, US GAAP) require that the statement of cash flows be part of a set of financial statements.

While the income statement amounts make the news, the amounts are based on the accrual basis of accounting. This method of accounting best measures a company’s sales, expenses, and earnings during a short time interval. However, the income statement does not measure and report the amounts of cash that flowed in and out of the company. For example, the income statement does not report the following:

• Cash collected from sales. (The cash might be collected from customers 45 days after the sale.)
• Cash paid for goods sold. (Payment may have been made many months prior to their sale.)
• Cash paid for buildings and equipment that will be expensed over the next 5 to 30 years.
• Cash received from the sale of long-term assets
• Cash received from bank loans
• Cash payments to reduce a loan’s principal balance
• Cash withdrawn by owners or cash dividends paid to stockholders

A company’s understanding of its cash inflows and outflows is critical for meeting its short-term and long-term obligations to its suppliers, employees, and lenders. Current and potential lenders and investors are also interested in the company’s cash flows.

Break-Even Point – For businesses on the verge of a cash crunch, knowing break-even points is crucial. Your sales and production teams must know how much work they have to deliver to keep the bills paid. Every business faces hard times, and if that ever happens to you, we can help you dig deep and control the excess.

Variable vs. Fixed Expense Reporting – Not all costs for your business are created equal. You will incur fixed costs regardless of what you do, and while you can reduce costs in this category, there’s only so much you can cut before the benefit to your business becomes less and less impactful. Meanwhile, your variable expenses are the costs you incur when you do work. The secret to getting wealthy is controlling these costs in an efficient manner. BFW works to identify these costs and keeping them in check.

Debt Planning and Reduction – If debt is a part of your growth strategy, BFW will help you optimize your liabilities so that they support you in your goal. If you have debt because your company has seen hard times, then we need to create a reduction plan for getting your company back on top.

Labor cost management – If you’re a staff-heavy organization, you must know as much as possible about your payroll costs. Is your staff operating efficiently? Should you give someone a raise, and if so, what will it do to your business over the long run? For businesses we’ve coached across the country, labor costs tend to be their biggest downfall. They have either over-hired or not staffed enough, and the bottom line gets strained.

Improved debt management – As you know, debt can cripple the progress of any company, regardless of sector. While there may be many different types of financial reporting concerning purpose or software, almost all solutions will help you track your current assets divided by the current liabilities on your balance sheet to help gauge your liquidity and manage your debts accordingly.

Trend identification – Regardless of what area of financial activity you’re looking to track, this kind of reporting will help you identify trends, both past and present, which will empower you to tackle any potential weaknesses while helping you make improvements that will benefit the overall health of your business.

Real-time tracking – By gaining access to centralized, real-time insights, you will be able to make accurate, informed decisions swiftly, thereby avoiding any potential roadblocks while maintaining your financial fluidity at all times.

Liabilities – Managing your liabilities is a critical part of your company’s ongoing financial health. Business loans, credit lines, credit cards, and credit extended from vendors are all integral liabilities to manage. By using a financial report template, if you’re planning to apply for a business expansion loan, you can explore financial statement data and determine if you need to reduce existing liabilities before making an official application. 

Financial Ratio analysis

Ratios are essential to a business’s fiscal management initiatives – and there are many, many to consider.

Ratios are a representation of the fine juggling act businesses must perform to ensure the entire operation runs with maximum efficiency. Financial ratios also help investors break down the colossal sets of financial data accrued by businesses.

A ratio gives your data form and direction, facilitating valuable comparisons on different reporting periods. Financial ratios are critical. Armed with this wealth of insight, it’s possible to preserve your company’s financial health while developing initiatives that tip the fiscal balance in your favor, boosting your bottom line in the process.

Financial ratios are mathematical comparisons of financial statement accounts or categories. These relationships between the financial statement accounts help investors, creditors, and internal company management understand how well a business is performing and of areas needing improvement.

Financial ratios are the most common and widespread tools used to analyze a business’ financial standing. Ratios allow us to compare companies across industries, big and small, to identify their strengths and weaknesses. Financial ratios are often divided up into seven main categories: liquidity, solvency, efficiency, profitability, market prospect, investment leverage, and coverage.

• Financial Ratios Using Balance Sheet
• Financial Ratios Using Income Statement
• Financial Ratios Using Cash Flow Statement
• Financial Ratios Using Balance Sheet, Income Statement and Cash Flow
• Other Financial Ratios

Progress and compliance – As the information served up by financial reporting software is both accurate and robust, not only does access to this level of analytical reporting offer an opportunity to improve your financial efficiency over time, but it will also ensure you remain 100% compliant – which is essential if you want your business to remain active.

Communication & data access – Any modern financial analysis report worth its salt is accessible to and optimized for a multitude of devices. By gaining unlimited access to essential financial insights and data, you can respond to challenges swiftly while improving internal communication across the board. If everyone understands emerging trends and can share vital financial data, your organization will become more efficient, more innovative, and safeguarded against potential compliance issues or errors.

Your Holistic Wealth is our business.

If you find yourself in need of Financial Reports and Financial Analysis Ratios to understand and grow your business, contact us!