Explore the World's Best Ideas
Join today and uncover 100+ curated journeys from 50+ topics. Unlock access to our mobile app with extensive features.
Build your financial literacy by learning key terms and concepts. Mastering the income statement, balance sheet and cash flow statement will give you a full picture of the business performance and health.
Action: Ensure financial statements and key metrics are reviewed at least quarterly with your team. Identify gaps in your financial knowledge and develop a learning plan.
47
622 reads
Carefully monitor revenue, cost and margin trends in the income statement. Look for signs of inefficiencies in expense categories that indicate opportunities to cut costs and improve profits.
Action: Create expense reduction targets for your team and hold them accountable for achieving them. Set gross margin goals for your products and services.
40
503 reads
Calculate asset-related, liquidity and leverage ratios to gauge the financial health of the business. Look for trends over time that indicate deterioration or improvement.
Action: Identify at least 3 ratios to track on a monthly or quarterly basis. Compare the ratios to industry benchmarks and set internal targets for improvement.
38
414 reads
Analyze cash flows in detail to ensure the business generates sufficient cash, uses cash efficiently and identifies opportunities to boost cash. Shortening the cash conversion cycle can significantly improve cash position.
Action: Create a cash flow projection for your area of responsibility. Revise processes and policies to improve collection cycles and reduce days in inventory.
39
349 reads
Establish financial targets and benchmarks to provide goals for your team to aim for. Compare performance to industry peers to identify where your company has opportunities to improve.
Action: Create revenue, margin and efficiency targets for your team based on benchmarks. Revise targets annually based on new performance data.
38
319 reads
Hold your team accountable for meeting budget goals. Thoroughly examine variances between actual performance, budgets and forecast to identify causes and actions.
Action: Build actionable budgets for your department that tie to organizational goals. Review budget versus actual variances with your team monthly.
36
340 reads
Develop a checklist of key financial questions to ask regularly of your team. Look for explanations of variances, trends and anomalies that indicate potential issues or opportunities.
Action: Create your list of diagnostic questions. Ask for evidence to back up explanations from your team. Stay skeptical but promote a learning culture.
36
346 reads
IDEAS CURATED BY
Other curated ideas on this topic:
20 ideas
Financial Intelligence for Entrepreneurs
Karen Berman, Joe Knight, John Case
8 ideas
Financial Intelligence
Karen Berman, Joe Knight
10 ideas
The Financial Diet
Chelsea Fagan, Lauren Ver Hage
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Personalized microlearning
—
100+ Learning Journeys
—
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates