Wednesday, March 30, 2011

Focus on Balance Sheet first to restructure d Business

Focus on Balance Sheet first to restructure d business

Entrepreneurs mainly focus on sales first and then profit. However it is the Balance Sheet and not P & L statement is the most important business document.  P & L Statement only talks about how company has fared operationally during that particular year. 

Its the Balance Sheet that reflects that whether company is receiving payment of sold goods, leverage is in order or its risky, whether company is  paying their suppliers in time or no, how much have company earned all these years and what company has retained in the business, funds diverted or no, bank limits are overdrawn or otherwise, liquidity position etc etc. 
Therefore review of balance sheet on an on going basis is a MUST to measure the company performance. Even if you want to restructure yr business start with Balance Sheet.

When was the last time Balance Sheet and implications were discussed with auditor or management consultant???

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