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Managing for Today and Tomorrow

In this second part of our business planning series, we dive deep into financial document analysis, focusing on balance sheets and income trends over the past five years. We will explore key insights about your business's efficiency, size, and debt management. Understanding how well your business utilizes resources and assessing the potential for expansion will guide your decisions moving forward. This review will help you determine if your current operations can support growth and how to strategically manage additional debt for future sustainability.

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Managing for Today and Tomorrow

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  1. Managing for Today and Tomorrow Business Planning Part Two Review of Financial Documents

  2. Review of Homework • What did the Balance Sheets tell us? • Did the five year trends indicate anything? • How did last year’s income compare to five years ago? • Other things you discovered?

  3. Evaluating Your Business • Efficiency • Size • Debt My milk stool has three legs

  4. Efficiency • How well does the business utilize its resources to generate profits • Getting a bigger truck when you are loosing money on every load you haul won’t help much!

  5. Size • Gross income : if you are going to add more people to support is the operation big enough to do that? • Do you need to add more enterprises or expand current enterprises?

  6. Debt • The business may be able to serve current debt without any problems but if we expand the operation and use borrowed money, then what does the operation look like? • Look at the ability of the business to service additional debt.

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