New Guide: Are You Ready to Take Control of Your Profitability?
In our latest guide, Build a Better Business by the Numbers, we explore the common pitfalls of profitability and how to avoid the mistakes that will harm your bottom line.
Understanding your profitability starts with an accurate understanding of your finances. Are all parts of your business equally profitable? How does your profitability project out for the year, over 5 years, 10 years?
Running a successful company is more than just maintaining profitability; it needs to grow. What are the steps to get there – and what common pitfalls could be holding you back?
Balance Sheets, Cash Flows & Revenue Traps
Assessing the financial health of your business involves a full review of your books, starting with your balance sheet.
As the thermometer of your business, your balance sheet plays a vital role in your success, helping to identify other critical financial measures, including:
- Working capital
- Net equity
- Debt levels
Cash flow, an equally important measure of financial health, is often misconstrued. Understanding this term – along with the difference between measuring revenue and profitability – will aid in growing your profitability.
An effective profitability analysis will provide key insights including a review of margins and other financial factors for success. To learn more about understanding and improving profitability, read our eGuide.
Looking through the Windshield vs. Rearview Mirror
Moving the growth of your business forward is about understanding your numbers while avoiding common mistakes along the road to profitability.
Clarifying the long-term goals behind your investments, scrutinizing the sustainability of your revenue growth, and balancing your focus between revenues and profitability will help in side-stepping the pitfalls of finance.
Focus on the numbers that help move your business forward – like cash flow – and establish accurate projections of revenue growth over the next 12 months. Not sure where to start? Work with a financial partner to help you determine your current – and potential financial health.
A CPA Partner to Help Navigate Profitability
Evaluating the financial health of a business takes skill, objectivity, and experience. An experienced accounting partner will undertake a holistic approach to understanding and improving your business, financials, and goals.
Kirsch CPA Group offers holistic business advisory services to assist businesses, nonprofits and other organizations throughout the Midwest to grow profitably and achieve their goals faster and easier.
With a team of seasoned professionals and a deep understanding of profitability measures, we can help provide the insights you need to develop strategies for growth based on accurate numbers. Speak with one of our accounting advisors to get started.