When we start to look at the financial statements of an organization, many questions come to mind to help improve operations and improve profitability. The numbers only tell part of the story, so we must dig deeper, looking at ratios, comparing budget to actual, evaluating trends and then looking at non-financial information as well.
The ability to analyze not only the financial data, but the non-financial data as well, is a crucial skill to being an effective manager. Customer and employee satisfaction, along with the internal business processes all will have an effect on the operation of a business. As an example, overlooking the number of complaint calls from customers may have a long term effect on sales. High employee turnover may affect the budgeted payroll numbers. So, the financial and the non-financial intertwine.
Learning these skills will be important in your work as a manager, so taking the time to practice and understand how to analyze is crucial!
