Assessing Financial Risk? You need more than just your numbers.

Assessment Chart

Starting up and staying in business is not without risk. But with the right understanding of industry metrics, combined with the application of accurate and intuitive financial and business data and analysis, the risks you face can lead to rewards—and the business risks themselves can even be rewarding in their own right.

Business risks are inevitable, and they appear in all internal and external forms. The risk variables you may encounter depend entirely on the specifics of your business and industry. Varying levels of risk are within some scope of your control, such as operational or legal risk. But other factors, such as an ever-changing economy, competitors, new products and services being introduced to the market, demand fluctuations, market regulations, and national and international trends, have a bearing on your business and are completely out of your hands.

When you combine those factors with effectively managing your business’s financial risk—financial transactions, loans, liquidity, assets, and accounts receivables—balancing it all is a difficult task. That’s why 25% of businesses fail within their first year, and the failure rates continue to increase year over year.

Effective risk management is critical to assessing your current business standing and positioning your business for short- and long-term success. It is easy to fall into the trap of feeling secure in running your numbers, looking over a spreadsheet, and then simply assessing from there whether your financials look good or bad. But that is not enough. This approach will set you up for failure, not success, because you’re not looking at the full picture—you’re only focusing on today, not effectively forecasting for tomorrow.

It’s not an easy task on your own. With IndustriusCFO, our analysis engine does all of the heavy lifting for you. Utilizing dedicated software that is designed to provide detailed financial data and analysis will arm you with more than just the numbers. You’ll gain a big picture view of where your business currently stands to help you accurately assess where you are today, while obtaining critical information and applicable analysis that will help guide your decisions for growth and sustainability.

Our financial and data analysis software provides you with a Business Scorecard that details the crucial information you need about the financial performance of your business on two levels; analyzing your own financial standings and key performance indicators, and additionally providing you with current industry metrics that compare your financial standings with your peers and competitors in similar businesses.

Not only can you see how your key performance indicators and financial ratios stack up, but we also identify areas of concern and provide you with flexible scenarios and suggestions that, if applied, can improve your business performance and position you to better achieve and/or maintain profitability. Additionally, by comparing your standing with your competitors and peers, you obtain critical insight about the health and performance of your company, rather than by examining only the financial statements and reports that are based on your own data.

From there, you can better leverage your financial assets, ensure you have adequate liquidity and cash flow, manage your debt-to-equity ratios and manage your financial obligations; allowing you to better address and mitigate your financial and business risks to improve your overall performance.

While economic, market, seasonal, and general fluctuations and downturns are unpredictable and out of your control, by investing in financial analysis software and putting that data into practice, you can accurately assess your current and potential financial decisions, make performance improvements, and ultimately assess adequate liquidity and ensure short and long-term success. With a deep and comprehensive understanding of the health and wellbeing of your business, you can apply financial risk assessments and recommendations that will allow you to create a plan for what factors are within your control, so you can better prepare for what’s not.

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