Analytical Business Reporting

The financial staff in a small business prepares analytical reports on a regular basis, often monthly. These reports show the variances of actual financial results to what had been forecast in the company's annual business plan. The finance team explains the reasons for any significant negative variances so the owner can decide whether to take action to correct the problem. For example if the company's gross margin as a percentage of sales declined for three months in a row as a result of commodity price increases, the owner could elect to increase the retail prices of her products in order to maintain profitability. Financial analysis reports help the business owner keep the company on course toward achieving its revenue and profit objectives.