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Current Business Performance Analysis

When operating a business, the owners should always be held accountable for how the business is currently performing.

Many businesses complete a monthly or quarterly business performance analysis.

This allows the owners to understand how the business is currently performing and if any changes to operations need to be made.

A performance analysis utilises a variety of techniques to measure the performance of a business of a particular time period.

This analysis can target all areas of a business, and help to reassess parts of a business that may be lacking.

The following are a few specific metrics or goals a business might consider during a performance analysis:

Sales

  • Ultimately the whole point of creating a business is to drive sales up and set up a comfortable profit for yourself and the business.
  • Evaluating your sales is very important as it provides insights about top performing & underperforming products/services, leading revenue generating activities and sales forecasting.

Profitability

  • Understanding where your business sits with sales in comparison with its cost of goods sold (COGS) and gross profit is crucial to your cash flow, your budget and your internal controls of the business.

Earnings Before Interest, Tax, Depreciation & Amortisation (EBITDA)

  • EBITDA is a measure of operating business performance and provides a snapshot of short-term operational efficiency.
  • This metric ignores the impacts of non-operating factors such as interest, taxes, or intangible assets, the result is a metric that is a more accurate reflection of a firm's operating profitability.

Return on Total Assets

  • The return on total assets ratio indicates how well a business’s investments generate value.
  • The higher the figure determined, the better the business is doing in regards to productivity.

Breakeven Analysis

  • A breakeven analysis will calculate the point where the business’s revenue will equal the business’s expense. In other words, it reveals the point at which you will have sold enough units to cover all of your costs.
  • This can help you determine fixed and variable costs, set prices and plan for your business’s financial future. 

Working Capital

  • Working capital is used in day-to-day operations and represents a company’s current assets minus its current assets.

Parallax Accounting’s new ‘Business Performance Coaching’ package can help you complete a current performance analysis and start taking your business from zero to hero.

We are here to help set your business up for financial success!

Book an appointment with Parallax Accounting to improve your business performance today!

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