Each and every business is built on figures, and these figures need timely analysis to understand how to make them grow. A thorough financial analysis not only helps in creating a solid business plan but also portrays in clear light the financial strengths and weaknesses of the company. The three most essential parts that a financial analysis should cover are the income, the projection of cash flow, and in the end the balance sheet. Here is how one can highlight these three sectors in a financial analysis:
- Income
This section needs to show the details of two of the company’s financial sectors, the revenue, and the expenses, and thereby also show whether the current state is one of profit or loss. In case of a new business, it is good to have an income statement every month, otherwise once in every fiscal quarter is good enough. Be sure to calculate every last bit of the expenses such as the bank charges, interests, utilities, etc., and the revenue calculation is usually easy since there is always a record of all the various payments received.
