How to Spot Trouble Ahead of Time

The New Year is a good time to take a fresh look at your company’s income statement. When business owners look at their monthly profit-and-loss statements, they may only be seeing the tip of the iceberg. It’s what looms underneath — that may cause enough damage to sink the ship — six or nine months down the road.

Spotting trouble ahead of time takes more than a quick review of sales, net income and cash positions. More in-depth analysis is the key to navigating around potential obstacles. Owners need to ask their controllers to dig into the numbers to better monitor business trends.

Recalculating and monitoring the Break-Even Point provides another management tool that can help business owners know the true contribution of each sale. To learn more, read about the Break-Even Calculator in Platinum’s Resources section.