Running a small business can sometimes feel like you’re in a silo. We focus on our own business operations, growth, customer acquisition and service. It can feel uncomfortable to step outside of our own box and compare ourselves to the competition. At Dodd Financial, we push the boundaries of this comfort zone with the Small Business Report Card.
Dodd Financial's Small Business Report Card - Insights Into Your Business Performance
James Dodd, MBA, EA
Financial Ratios - A Comprehensive Business Health Check Up
With Dodd Financial Bookkeeping & Tax, your financials are compared to publicly traded companies in your industry to show how your business’ performance matches up to the largest companies in your field. We prepare your report card using several key accounting ratios:
1. Solvency – Your business’ ability to meet its long-term debt obligations
a. Debt Ratio
b. Debt-Equity Ratio
c. Interest Coverage Ratio
2. Liquidity – Your business’ ability to meet its short-term debt obligations
a. Current Ratio
b. Quick Ratio
c. Cash Ratio
3. Profitability Ratio – Your business’ ability to generate a profit
a. Profit Margin
b. Return on Equity
c. Return on Assets
d. Gross Margin
e. Operating Margin (Return on Sales)
Mirror Success
Taking the leap to compare yourself to the gold standard in your industry can assist you in making strategic decisions to close the gap in your business’ performance vs. the competition. Should your small business look exactly like a Fortune 500, publicly traded company? Probably not, but it doesn’t mean that there are not some aspects of the business that you should strive to mimic.
Dodd Financial strives to empower our clients to use their financial data as a resource for making strategic decisions. The Small Business Report Card is just one more tool in our toolbox to help you get there. Dodd Financial Bookkeeping & Tax is your dedicated small business bookkeeping service with Big business expertise.