A financial and operational review là năm 2024

In the same way that you can’t fly an airplane with just one instrument gauge, you can’t manage a company with just one kind of performance measure. Think of a balanced scorecard as the instrument panel in the cockpit of an airplane. It’s a set of interrelated gauges that links seemingly disparate information about a company’s finances and operations. Together, they give you a more complete view of how your company has been performing, as well as where it’s headed.

A balanced scorecard asks you to think of your company’s mission and strategy from four key perspectives:

1. How do customers see us?

2. What internal processes must we excel at?

3. How can we continue to improve and create value?

4. How do we look to shareholders?

Next, identify the handful of measures that are most critical to your company’s success in each of the four perspectives. Tracking all the important measures at once guards against suboptimization—that is, achieving gains in one area at the expense of another.

The Idea in Practice

What you measure is what you get: the measures you use strongly affect the behavior of your managers and employees. When building a balanced scorecard, tailor the measures to fit your company’s particular challenges. That way, you’ll be more likely to get the performance you need to succeed.

1. Customer perspective. Today’s typical corporate mission says something general about customers. The balanced scorecard requires specific measures of what customers get—in terms of time, quality, performance and service, and cost.

2. Internal business perspective. Focus on the core competencies, processes, decisions, and actions that have the greatest impact on customer satisfaction. ECI developed operational measures for submicron technology capability, manufacturing excellence, design productivity, and new product introduction. Company managers then made sure to “decompose” the measures to department and workstation levels, where much of the action took place.

3. Innovation and learning perspective. Measures in this area indicate future success. They measure continual improvements to existing products and processes and introduction of new products with expanded capabilities. Milliken & Co. implemented a “ten-four” improvement program, requiring reductions in key adverse measures (defects, missed deliveries, and scrap) by a factor of ten over four years.

4. Financial perspective. Financial measures are essential for indicating whether executives have correctly identified and constructed their measures in the three foregoing areas—but they can also help determine future direction. For example, a chemical company created a daily financial statement. Putting income and expense values on every production process helped plant supervisors see where process improvements and capital investments could generate the highest returns. Example:

A semiconductor company that the authors call Electronic Circuits Inc. (ECI) established the goal of becoming customers’ supplier of choice. To track this goal, the company conducted customer surveys, which revealed that each customer had a different definition of what constituted reliable and responsive supply. As a result, ECI discovered that it was not satisfying some customers and overachieving the expectations of others.

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Do you know the true importance of measuring your company’s results? Does financial reporting analysis really help your business grow? As an owner it is essential that you have periodic reports that teach you the economic situation of your business, this will facilitate administration, improve operations and make strategic decisions focused on the growth of your company.

Here are 3 financial reports you need to analyze to increase corporate agility, steer your finances toward savings, and make informed decisions:

Balance Sheet: This report contains valuable information; it will provide you with an accurate picture of the financial health of your company. It summarizes the assets, liabilities, and equity of shareholders at a specific point in time. It is used to identify trends, make financial decisions, and determine the solvency of your business.

Cash flow report: As the name implies, the cash flow statement shows how much cash you generated and how you used this cash. Three activities are considered in preparing this report: operational, investment and financial activities. This report shows the real movement of your money, and that is when it differs from the income statement, because, if most of your sales were made through credit, the cash flow statement will not reflect it.

KPI’s: management indicators will give you a quick and clear review of performance of your operations. The advantage of generating KPIs is that they can be implemented by departments, functions, teams and even projects, this type of reports will be a boost to make daily operations more efficient.

There are more reports that can be generated and reviewed, but analyzing these three reports mentioned above, will allow you to provide your management team with a guide for decision making. In My Accounting Now, in addition to supporting your company in the efficient management of accounting, we analyze and review the financial statements of your company, so you can make better economic decisions, increasing the possibility of obtaining greater income in the future. Monthly or quarterly, we will analyze the current risks and returns on investments. To learn more about our services schedule a free first consultation with our team by clicking HERE, calling +1 786-228-8689 or writing to [email protected]

What is the financial and operational review?

An effective operating and financial review (OFR), incorporating a discussion of financial performance, position, strategies and future prospects can be a powerful tool for a company to tell a story of their past, present and future performance and direction.

What is an operational review?

What is an Operational Review. An operational review is an in-depth and objective review of an entire organization or a specific segment of that organization.

What is financial and operations?

Financial operations management refers to the process of overseeing the various functions of a business's financial activities. All businesses engage in financial activity, which is based on the concept of transactions.

What is the purpose of a financial review?

An essential component of financial management is a regular financial review of activity to identify errors, anomalies, potential compliance issues, and significant budget variances.