It’s not uncommon for a business manager or owner to perform well in many of the critical disciplines needed to succeed in business, but still fall short on making a profit or the income they need to survive. It’s particularly frustrating for a small business owner who puts their heart and soul into their business. They see it grow with customers who love their service, but then their business fails (or nearly fails) because they are unable to pay themselves the income they require. Adding to the frustration is knowing they could earn that needed income working for someone else.
Financial analysis is an important topic that helps business managers and owners gain a deeper understanding of how their business is performing and how to increase their net income. It provides insights not available by looking at the bank statement, reviewing end of year tax statements, or reviewing corporate income statements. It represents a wide range of analyses useful in understanding different facets of the performance of the business.