Analyzing financial statements is one of the most challenging—not to mention, important—aspects of planning for growth. As a business owner, you know all there is to know about your industry, your target customer, and your market. When you review your income statement, balance sheet, and cash flow statement, you have a general understanding of each item and how the numbers are calculated. Surely you can take it from there, right? Not necessarily, says Ann Irons, CPA, LLC, who provides tax and accounting services in Holliston, MA.

The Difference Between Reading and Analyzing a Statement

The most critical pieces of information on a balance sheet include the value of your assets, liabilities, and what remains after all financial obligations have been met. People often refer to the balance sheet as a snapshot of a company’s financial position because it shows these accounts at the end of the last business day of the specified period. In the capable hands of an experienced Holliston CPA, and combined with data from the income statement and cash flow statement, the balance sheet is more than just a snapshot. It’s your past, present, and future.

The Importance of Accurate, In-Depth Analysis

We meet with many business owners whose use of financial statements is limited to making purchasing decisions, such as how much to spend on supplies, how many additional hours of help can be hired, and whether to replace equipment. Actually, financial statements can do so much more. When Ann goes over your financial documents, she will identify opportunities and threats that may affect the course of your business. Analysis also provides insights that will help with decision-making, answering such questions as:

• Do we have sufficient capital to invest in new opportunities?
• If not, how much can we reasonably borrow?
• Are we using our assets in a way that maximizes profit?
• How will our financial position look in the eyes of potential investors?

Ann will also work with you to determine whether your current accounting practices are in line with the relevant state and federal requirements, and whether they are providing the most accurate results. In some cases, our clients use this information to continue with internal accounting. However, others find that outsourcing these tasks to Ann and her team affords peace of mind and relief that they will not be required to perform complex financial calculations, and that they will no longer worry that their current accounting method may raise red flags at the IRS during tax season.

What do your financial statements say about the future of your business? To learn more about financial analysis, or to schedule a meeting with Ann Irons, CPA, LLC, contact our Holliston office at (508) 966-0700. We offer accurate, economical financial and tax services for business owners and individuals alike.