When I realized the date of my next column, I couldn’t resist! OK, yes! I’m a Star Wars Nut (also a Trekkie, a NASA Nut, etc.) For all you Stars Wars Fans, you get the title to this column… for the rest of you, sorry for the confusion. (Hint: It has to do with today’s date.)
Today, I want to talk about a simple concept of business, that being quarterly financial statement analysis. (There’s the connection to the “fourth.”) The “big boys” (or “big girls” if you prefer) of the corporate world wait patiently for their first quarter results to come out in April. The Stock Market reacts every quarter to whether the listed companies met their projections or missed them. In the business world, almost everything is driven by and matched to quarterly results.
So, in your business, how are you doing? Have you done your “quarterly review” yet? (I really hope you’re not one of those who waits until their taxes are done to know how they did for the year. If you are, call me, we need to talk!)
Basically, after the first quarter results are in, you have an opportunity to measure your company’s performance and still have three quarters to make changes if needed, or stay the current course.
So, what did your first quarter tell you about your business performance? Were your profits about what you expected or were they off? What can you do to tighten up expenses, increase sales, etc., to catch up if they fell short? Did your labor costs go up too much? Did your raw materials costs go up more than expected? Did your sales fall short of your expectations? Was your Cost of Goods Sold as a percentage of Gross Sales in line with prior periods? Did you lose very many customers to your competition? (Or did you gain a lot of customers from your competition?) What changes did you implement… how did those changes work out for you? Do your employees need more training to make them more efficient and profitable for you? How was your quality control… did you have to “fix” a lot of work before it got out the door? What can you do to improve your quality control?
As you can see, there are lots of questions you should be asking yourself and answering, then making adjustments/changes to your business to improve your next quarterly results (out in July). Make it your goal to have accomplished GREAT improvement for your NEXT quarterly review. Seek out your CPA to go over your quarterly results and get their input.
Did you hear? Prov 15:22 says, “Without counsel plans fail, but with many advisers they succeed.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.