Tuesday, November 24, 2009

What sort of company do you have?

I was reading Seth's blog today.  www.sethgodin.typepad.com   Seth's post today was what sort of accent do you have?  "Can your writing have an accent? Of course it can. Not just grammar errors, but sentence length, exclamation marks and your vocabulary all tag you. And the fonts, colors, pictures and layouts you choose are part of your accent as well."

Well, my universe is financial statements.  Can financial statements tag you like words?  Of course, they can.  Most financial statements are measured in terms of liquidity, leverage, profitability and activity.   how much cash or working capital you have says something about you.  How much debt you have in your company signals the level of risk you're willing to accept in order to manage your business.  How profitable you are says how well your products and services are received in the market and how successful you control expenses.  How well you manage your accounts receivable, inventory and accounts payable all tell the story of how efficiently you run your company and what procedures you have in place to manage these.

Thanks, Seth.  Your article "what sort of accent do you have?" reminded me to ask my readers the question what sort of company do you have? and what do your financial statements say about your company?  Are you happy with their story?

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