Step Two: Calculate the Company’s Profitability before Developing Sales, Marketing, and Growth Strategies
The financial ratio analyses presented in the previous discussion involved mostly balance sheet items to see if the company’s cash and credit situation can support growing the company. Income statement analysis, on the contrary, sheds light on the profitability of products and services. It leads to the overriding strategic question, “Can the business’ products and services generate the desired amount of profit for future growth?” This analysis should be the second step toward setting the ground work for developing a growth strategy.
After reviewing the balance sheet to make a preliminary assessment of the business’ financial situation, an ...
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