How to Evaluate Your Company Against Time and Rivals

Is your business trending up and beating the competition?

It is critical to understand how your company is performing before making any capital investment, formulating business plans or borrowing money.  What you don’t know is dangerous territory for making important business decisions.  Get smarter by doing the research on your company’s financial performance.

After you have calculated your operating, liquidity, profitability and leverage ratios the next step is to track your results across time periods and against industry competitors.

  • Time-series analysis looks at the changes in financial indicators across similar time periods. Compare a month, quarter or fiscal year to the same period earlier.
  • Cross-sectional analysis compares your financial indicators with industry competitors. Private companies are secretive with their financial data for obvious reasons so it might be impossible to compare results. Instead, find the publicly traded company that leads your industry and evaluate their financial results for a general idea of the industry standard.

You can learn to calculate and understand basic financial statement indicators including operating, liquidity, profitability and leverage ratios. Monitor your financial engine across time periods and against competitors as you safely navigate the twists and turns of the roads in your industry.

Advertisements

About Michael Shelton

Your Business Coach Facilitating Delegation and Work Group Engagement Michael Shelton has over twenty-five years of business and military accomplishments, including extensive experience with one of the largest, publicly traded real estate investment trusts (REIT). He is a qualified business coach with assignments in cross-functional work group management, strategic planning, unit leadership, joint venture acquisitions, executive education, mentoring, training and merger integration. Michael has accumulated best practices for building committed work groups from more than $4 billion of capital markets transactions and commercial property development. He served as a commissioned officer and helicopter pilot in the U.S. Army, and earned his MBA from The University of Arizona. Michael has served as a major conference panelist and is the author of Cash Flow Rich, Winning Ways to Evaluate and Finance Real Estate. Today, he helps business owners get more work group engagement as President and CEO of Shelton Business Services, LLC in Scottsdale, Arizona. Disclaimer: I don't offer investment, legal or tax advice. Talk to your broker, accountant or lawyer for investment, tax and legal help. I might own stock in the companies I mention on-line. My posts, tweets and other on-line activity are my personal thoughts and don't represent my employer or company.
This entry was posted in Business Borrowers, Executive Coaching, Finance, Financial Planning, Management Consulting, Strategic Planning, Uncategorized and tagged , , , , . Bookmark the permalink.