When financial statements are analyzed together, they give managers a holistic view of the organizations financial health. Here are three ways managers can use financial statements to make decisions:
1. Measure Impact
Having a method for tracking how all activity within the company impacts the bottom line is imperative to current success and future growth. Take a look at your company’s income statement, and note the direct expenses related to the revenue for that period. 2. Cut Unnecessary Costs
By looking at expenses line by line on both the income and cash flow statements you are able to identify where expenses can be cut. Seeing a list of every expense and how it impacts your company’s net income can be an eye-opening chance to save money and reallocate spend where it’s needed most.
3. Think Big Picture
Analyzing the balance sheet, income statement, and cash flow statement can allow you to understand the ins and outs of your company’s finances and give you bigger-picture clarity to guide your goal-setting and decision-making processes.
Here at SAS, we help our clients understand each financial statement so they feel equipped to make profitable business decisions. Schedule a consultation today!
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