What Financial Numbers Should Brokers Be Looking At?

One of the most common questions that brokers/owners ask is this: "What numbers should I be looking at?" This is an intensely personal question, since it goes to the root of what type of operation you are running. The goal in this article is to guide you to some key numbers you should have a handle on.

First let's agree on one thing--you need an up-to-date, accurate, financial statement. Your financial statement is your roadmap to financial health, read it like you are going somewhere! You don't go on a trip without planning your route and tracking your progress. So why would you treat your company any different? Having accurate and timely financial statements is the key to financial health. Finding out how you did in your last fiscal year when your CPA gives you statements six months later is ineffective. The information is out of date and not relevant to what is currently happening in your business. So the first set of numbers you should look at is your current financial statement – and it must be in a format that you can read.

A statement that shows the most recent twelve months of activity is critical. This is what will allow you to spot trends and get a feel for what direction things are heading. The financial statements that your CPA gives you, with a column for last year and a column for the current year might be required for your income tax return but they do little to help you understand the flow of your business. Only a spreadsheet type twelve month statement will do this. The year-end date of your company doesn't matter here either; you need to see the most recent 12 months, regardless of the fiscal year they fall in. The fiscal year is just a convention created by the government and accountants to fit your numbers into a nice neat slot for them, not to help you run your business.