Measuring Financial Health
05/20/2021
Steve Kluemper, AgriStrategies, LLC, provides great advice on measuring a company's financial health in this blog post. He provides clear definitions of key ratios that must be monitored and analyzed.
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Analyzing the many factors contributing to a business’ financial health is much like analyzing the many factors contributing to a person’s overall health.
A doctor may look at a patient’s temperature, weight, blood pressure, heart rate, blood tests, genetics, history, lifestyle, etc. to determine the individual’s overall health condition and the likelihood they may or may not have health issues in the future. Using just one of these items may be an indicator, but it won’t paint the whole picture.
Analyzing the “health” and future prognosis of a business is done much the same way. While some individual factors, like cash flow, may bear more immediate impact, to fully understand the financial health of the business, we need to look at many different factors. This is why we encourage managers to use historical and projected ratios to better assess their historical trends, current financial health and long-term outlook for their business. Understanding the trajectory of a particular ratio and the rate of change is important in determining the impact.
For the complete blog, follow this link:
https://agristrategiesllc.com/measuring-financial-health-by-steve-kluemper/
Steve Kluemper, AgriStrategies, LLC, provides great advice on measuring a company's financial health in this blog post. He provides clear definitions of key ratios that must be monitored and analyzed.
= = = = ==
Analyzing the many factors contributing to a business’ financial health is much like analyzing the many factors contributing to a person’s overall health.
A doctor may look at a patient’s temperature, weight, blood pressure, heart rate, blood tests, genetics, history, lifestyle, etc. to determine the individual’s overall health condition and the likelihood they may or may not have health issues in the future. Using just one of these items may be an indicator, but it won’t paint the whole picture.
Analyzing the “health” and future prognosis of a business is done much the same way. While some individual factors, like cash flow, may bear more immediate impact, to fully understand the financial health of the business, we need to look at many different factors. This is why we encourage managers to use historical and projected ratios to better assess their historical trends, current financial health and long-term outlook for their business. Understanding the trajectory of a particular ratio and the rate of change is important in determining the impact.
For the complete blog, follow this link:
https://agristrategiesllc.com/measuring-financial-health-by-steve-kluemper/
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