Multi-Unit Franchisee Magazine Issue I, 2014 | Page 91
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namely, why would anyone in their right
mind do this?
For now, let’s be clear on the action
steps. First, you need 3 years of financial
statements (or as many as you have). Second, you need to lay out your statements
in a spreadsheet format (which is nothing
more than putting all the financial data on
one sheet, side-by-side, by year). Third, use
the same spreadsheet format to calculate
your financial ratios.
Take a few minutes to read and study
the ratios in the table, how they’re derived,
and what they measure. Note that the ratios are broken down into three functional
areas: 1) balance sheet ratios, 2) profitability ratios, and 3) asset management ratios.
We will be looking to develop financial
“balance,” since no individual ratio is the
entire story. Taken together, however, we
can now begin the process of analyzing
your performance—and more important,
planning for the future.
In general, there are three ways to use
these ratios to analyze your business. The
first is to compare your current performance with your performance in previous
years (trends). The second is to compare
your present performance with others in
your industry (I’ll provide some industry
figures next time). And third is to compare
your ratios with your plans in developing
a workable operating strategy.
You operate and manage your firm with
limited resources, management, capital,
and time. You can’t fix current problems
or spot developing ones unless you know
where to look. This “Fiscal Physical” process I’m describing is merely an efficient,
effective method to keep your finger on
the pulse of your company.
Steve LeFever is the
founder and chair of Business Resource Services (BRS),
a Seattle-based consulting
firm that provides financial
management education, network benchmarking, performance group
facilitation, and bookkeeping services for
closely held businesses under its Profit Mastery brand. Learn more at www.profitmastery.net. or contact him at 800-488-3520
x14 or [email protected].
Advertiser Page
2014 Conference Calendar
Back Cover
81
2014 MU II Advertising Deadline
2014 MUFC Save the Date
71
2014 Multi-Unit Buyer’s Guide
77
39
Black Bear Diners
Brixx Wood Fired Pizza
39
BullsEye Telecom
23
Burger 21
73
Captain D’s
35
Checkers 3
Denny’s IFC
Dunkin’ Brands
7
East Coast Wings & Grill
41
East Of Chicago Pizza
73
Empire Builders
IBC
Feed America
51
Firehouse Subs
71
Forever Yogurt
25
Franchise Learning Academy
13
franchiseIQ 53
Franchising.com 91
57
FRANdata Corporation
Fuddruckers Inc.
51
29
Fuzzy Peach
Golden Corral Buffet & Grill
73
Grow to Greatness
49
Hungry Howie’s Pizza
31
Hurricane Grill & Wings
14, 15
International Franchise Association
55
J.D. Byrider Systems, Inc.
49
Jake’s Wayback Burgers
41
Jersey Mike’s Subs
Custom Insert
Jimmy John’s Gourmet Sandwich Shops
9
Johnny Rockets
37
71
Kennedy’s All-American Barber Club
Mama Fu’s Asian House
37
Massage Envy Spa
43
Massage Heights Corporate, LLC
35
McAlister’s Deli
43
Moe’s Southwest Grill
31
Newk’s Eatery
73
Papa Murphy’s
75
PATRIOT CREATIVE GROUP
45
PET SUPPLIES PLUS
33
Red Mango
1
Robeks 51
Sears Hometown & Outlet Stores
45
Snip-Its Haircuts for Kids
75
Sport Clips
29
SurePayroll, Inc.
19
33
sweetFrog Premium Frozen Yogurt
The Coffee Beanery
75
Togo’s 75
Watermill Express
5
We Love Franchisors
85
We Love Suppliers
83
Wingstop Restaurants Inc.
47
Wok Box
10, 11
ZIPS
47
Multi-Unit Franchisee Is s u e I, 2014
89