Kateryna Suprun
Leading financial expert with 15 years of experience in finance, co-author of the courses ‘Business Money’, ‘Business Numbers’ about financial models from Finmap, 200+ completed cases in various business areas
The beginning of the year is an opportunity to see the true picture of the business based on the results of the past period. What worked best? Where are the hidden reserves for growth? How can you prepare the financial foundation for a successful start to the new year?
In this article, we will explore how to summarize the financial results of the year without missing any important details and how to prepare for planning the upcoming year.
Effective financial planning and summarisation helps businesses make informed decisions and avoid mistakes. Follow these tips to make the annual reporting process more accurate and convenient.
Financial analysis is the foundation of effective business management. To make the right decisions, it is important not just to record income and expenses but also to evaluate key indicators, track their dynamics, and identify patterns.
This will help uncover the strengths and weaknesses of the business, optimize costs, and improve financial results. Let’s explore which indicators should be analyzed and how understanding them can enhance profitability and financial stability of the company.
Regularly assessing key indicators allows you to control the financial situation and identify hidden opportunities for growth. A strong business is built not on assumptions, but on accurate data.
Therefore, it is important not just to look at the numbers, but to understand their meaning, learn to forecast risks, and act proactively. Those who systematically analyze their finances achieve stability and a competitive advantage, which ultimately determines the company’s future.
Annual analysis is not only an assessment of the company’s performance but also an important tool for strategic planning, allowing you to:
If throughout the year the company faced issues such as a lack of working capital, failure to account for seasonality, or a slowdown in sales, it signals the need for changes.
It is important to focus on the ratio of working capital to current liabilities to avoid cash flow gaps. Profitability and margin indicators should be used to assess the effectiveness of resource utilization.
Annual analysis helps identify the most profitable projects and assess the costs of supporting unprofitable ones, as well as their impact on overall financial performance. Based on the report, insights can be gained on alternative monetization strategies or the reformatting of unprofitable assets.
Predefine the break-even point for each business area to keep track of the indicators throughout the year.
Use the data collected to compare with market averages and adjust the strategy to external changes. Market shifts may require adjustments to pricing policies or product assortments.
Assess possible business development scenarios based on financial data and prepare flexible strategies for different economic conditions (growth, recession, changes in demand).
Annual reporting is also one of the key foundations for building a financial model for the business, which in turn helps to find answers to questions such as:
Thus, compiling annual reports helps analyze business performance and make informed management decisions regarding future development. It’s important to note that you can quickly obtain accurate annual results only with a well-established systematic accounting process.
Finmap will help organize your finances and become your reliable support in the world of numbers. No more trouble with reporting!