Directions Business is a numbers game, and survival in the marketplace depends o

ID: 397285 • Letter: D

Question

Directions

Business is a numbers game, and survival in the marketplace depends on having the right numbers in black ink. It is necessary to compare your venture to other businesses in your industry by calculating key financial ratios. Review the financial ratios in Figure 8.10 in Chapter 8 of your text.

Go to BizStats by BizMiner and select “Financial Benchmark Reports” – Select “Sole Proprietorship” or “Corporation” or “S Corp” – Select your Industry (for example, Retail – food & beverage), then you will see various business statistics and financial ratios. Look at the Industry Financial Ratios for your industry at the bottom, and recap this specific information in a 1-2 page paper including the industry you chose.

Explanation / Answer

Answer:

The business is a number game and survival in the marketplace depends on having the right number in the report.

Following are the business financial items need to be review with other businesses in order to review the position of the organization and its financial credibility in the given market for existing business.

Financial Headings

Remarks

Sale (in nos.)

This measure the sale number/year for the organization

Sale (in Value)

This measure the sale value/year for the organization

Revenue

Revenue generated in the year

Earnings Before Tax

Earning before submitting the tax to governments

Earnings After Tax

Earning after submitting the tax to governments

Profit Without Tax

Profit Value calculated before Tax

Profit without tax (%)

Profit in % calculated before Tax

Profit After Tax

Profit Value calculated After Tax

Profit After tax (%)

Profit in % calculated After Tax

Forecast Growth (%)

The Forecasted growth for the company for the year

Annual Growth (%)

The actual growth for the company in the year.

This are the key financial indicators. there could be additional indicators based on the need ot the organziation.

The figures for the organization can be filled in the above format and this can be compared with the financial figure of the other similar organization. Thus the comparison of financial figure helps in assessing the financial position of the company in the market. Since the financial data are confidential, we could not be able to mention the financial data of any organization here.