There are a variety of reasons why your business might seek the expertise of a financial analyst. Whatever the reason, however, the goal is always the same. A financial analysis can help you better understand your business and maximise its potential by limiting redundant expenses and exploiting potential growth.

When it comes to financial analysis of a company, timing can be everything. Check out these common situations when an analysis can be the most useful.

What is a financial analysis and why does it matter?

A financial analysis is a formal assessment of your business’ performance, efficiency, and profitability. Financial analysts use past and present financial data to create a forecast for future business growth and potential. Analyses examine operations, profit margins, revenues, and solvency, but may require certain assumptions if any of these elements are unavailable (which is often the case for newer businesses). The results and insights that arise from an analysis can shape a business’ decisions regarding their financial modelling and growth plans.

When your business may need a financial analysis

Financial analyses should be undertaken regularly to ensure you have the best possible understanding of your financial capacity, but certain situations and circumstances call for an analysis more than others. You should definitely consider a financial analysis if your business is facing one of the situations listed below.

1. Just starting out

Analysis for a new business looks a little different than it does for established ones, but still ultimately serves the same purpose. Because a new business does not have past financial data to look back on or establish trends, financial analysis must look only at existing expenses to create a model for future profitability. This can give new business owners more accurate expectations of the expenses they should plan for.

2. Struggling to pay the bills

If your business or property is generating revenue, yet you are unable to get out in front of your expenses or generate the profits you think you should be capable of, a financial analysis can be a great help identifying areas of inefficiency that are preventing your business from realising its potential. Your financial analyst can break down and itemise your expenses to help you pinpoint areas of possible savings.

3. Looking to grow

Even if your business is thriving, a financial analysis can help you find the capital or liquidity you need to take your business to the next level. Businesses often turn to financial analysis when they are preparing to move to a larger location, make a wave of new hires, or undertake new products or services.

4. Considering loans or investments

Expanding your business often means an injection of capital beyond your standard revenue flow. Therefore, businesses often turn to commercial bridge loans to pay for new investments that could yield higher profits. This is often the case for property investors as they look to expand their portfolio.

Financial analysis for your commercial development

Keeping a close eye on your books is just good business. A financial analysis is a great way to demonstrate your commitment to your business or property. You can further prove that commitment by enlisting the top financial advisors Auckland has to offer. CFS Bridge Finance are experts in assessing the market potential of property developments and other businesses. Contact CFS Bridge Finance today to see what your business is capable of.

Financial analysts examine financial data for a company
When Does Your Business Need a Financial Analysis?

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