Financial Analysis & Forecast

The Foundation for an Executable Business Strategy

While many company owners fly blind without ever reviewing their financial statements, no company can possibly achieve its full potential without using the financial statements as the the instrument panel for guiding operational and financial decisions.

Simply reviewing historical financials, however, is not enough.

It it critical to take the time to use the financial statement to generate a forecast of where the company is headed based upon past performance and then take control of the 'critical factors' that determine the ultimate profitability of the company.

All important decisions should be made in the context of a consistent forecasting/planning/budgeting process weighing the pros and cons of strategic initiatives in a systematic way with real data.

Forecasting is the foundation.

All successful large corporations use a process of forecasting, make plans based upon the forecast and then budget accordingly.

Many of them have hundreds, if not thousands, of people directly involved in this process of providing management with the information necessary to make key strategic decisions utilizing business intelligence systems (BIS) that are licensed at 10s of thousands of dollars per year.

We specialize in working directly alongside management teams to implement these time tested methods and execute strategies by providing our financial and operational expertise and experience on an outsourced basis at a fraction of the cost of in-house personnel or licensed systems.

Make Better-Informed Decisions

Bookkeeper > The Kinney Group > Decisions Makers

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As the foundation for our Outsourced CFO services,
we analyze the previous 3 years of Financial Statements and provide:

Operating & Financial Ratios

Your Financial & Operating Ratios provide a snapshot of the overall health of your company. We provide over 19 ratios including:
Liquidity Ratios
Efficiency Ratios
Coverage Ratios
Leverage Ratios
Operating Ratios
Profitability Ratios
Expenses to Sales Ratios

Income (P&L) Forecast

The income statement, most often referred to as the P&L (Profit & Loss) statement and also the statement of operations or statement of income, is one of the primary financial statements used by accountants, business owners and funding sources to determine how profitably a company operates.

Our Income Statement Forecast projects future profitability based upon a linear regression of performance over the previous 3 years. It provides the essential foundation for setting immediate goals as well as year-end, in-depth plans and budgets based upon realistic assumptions.

Cash Flow Forecast

The Cash Flow Statement indicates whether or not a company is able to finance future growth.

A company can be exceedingly profitable and still fail. If, for example, it must pay for inventory upon receipt, takes 30 days to manufacture finished goods, an additional 30 days to sell and ship, and gets paid 30 days later - it has to be able to finance its revenue for 90 days.

The Cash Flow Forecast  is essential to the revision of every assumption in any business planning or budgeting process.

Balance Sheet Forecast

The Balance Sheet provides a snapshot of the assets, liabilities and shareholder equity of the company in each projection period.

The balance sheet thus provides the financial position of the company at any given time including cash position, what is owned and what is owed. It is essential because it provides creditors with critical information to determine the asset position of the company and the risk of extending credit and current and potential investors with an indication of book value.

Pro-actively Manage with a Rolling Forecast

The information provided in this first step of all of our engagements provides the foundation for establishing realistic goals based upon actual historical performance.

Financial Forecasting determines the current stability of the company and the likely future performance of the company based upon realistic assumptions derived from past performance.

A Rolling Forecast provides the foundation for PRO-actively managing the company rather than merely reacting to historical performance each month.

Internally, the initial Financial Forecast is essential for Planning purposes and the Rolling Forecast is essential for ongoing, pro-active management.

Externally, the Financial Forecast is critical to positively and credibly position the company with, and present the company to, Investors, Lenders and Shareholders.

SCHEDULE MY 5 YEAR FORECAST

So What Makes Us Different?

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Our Systematic Process

  • Strategy Session

    We provide the forecast to ownership and then conduct a meeting with the owners and the senior management team to identify financial and performance drivers (critical factors) that can be better managed to positively impact future performance. This optional 1/2 day strategy session yields a high-level strategy and starts the process of creating alignment to the corporate vision.

  • Develop Fully Customized Management System

    We then conduct a full day planning session with all members of the management team that have responsibility for those financial and performance drivers (critical factors) and establish aggressive but achievable goals for the company based upon the historical analysis. This meeting introduces the Critical Factors Management System and solidifies the process of creating alignment and engagement throughout the organization. Every aspect of the meeting is documented within 5 business days including the performance management system (Critical Factors) that is customized to the unique requirements of each client company.

  • Monthly Performance Monitoring & Course Correction

    We receive a monthly update of financial statements which enables us to provide a rolling forecast including projected cash flows based upon current performance. We conduct a monthly, ½ day meeting with the management team to review performance and implement timely course corrections in order to ensure year end goal achievement. Complete documentation is produced and distributed within 72 hours of each meeting.

  • Year End In-Depth Planning & Budgeting

    We conduct a year-end, in-depth planning session, usually in November or December, during which every financial and productivity driver (critical factor) is analyzed and discussed. We work with the management team to revise the goals of the company for the next five years, develop a comprehensive strategy to achieve the goals (including contingencies for anticipated potential threats) and finalize the financial and performance budgets that will enable the company to achieve the goals for the succeeding year.

  • Monthly Performance Monitoring & Course Correction

    We receive a monthly update of financial statements which enables us to provide a rolling forecast including projected cash flows based upon current performance. We conduct a monthly, ½ day meeting with the management team to review performance and implement timely course corrections in order to ensure year end goal achievement. Complete documentation is produced and distributed within 72 hours of each meeting.

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LET'S GET STARTED!SCHEDULE MY 5 YEAR FORECAST NOW