The Importance of Projecting the First-Year Financial Performance Monthly

The Importance of Projecting the First-Year Financial Performance Monthly

As a business starts, they have ambitious goals, but that may not always happen within the company, especially in the first few years. Companies are like roller coasters because their needs are forever changing with ups and downs. They projected financial statements, “income statements and balance sheet developed for the future years to forecast the potential impacts of various recommendations proposed for implementation” (David, David, & David, 2019). The first-year performance must be every month because it is essential to see what is happening in the business to help predict future trends. When a company first states, they have no data to compare what could happen. The tracking will help the company understand if they are going in the correct direction and some possible changes that could be made. The monthly report will help the manager determine necessary employee hours. Using the monthly reports, the business may find out that they need to staff less at night and more in the afternoon. The words will help you predict what products the company requires and where orders could be changed. Reviewing the quarterly yearly reports will help the business create some historical accounts and help predict the next quarter better. Annual reports show what happens within the year, but reviewing those yearly reports quarterly will help the company see where fluctuation can occur. Although we are in the middle of two major cities in my town, we know that summer and holidays are the busiest times. The businesses in the area over staff during this time and then cut back on hours. MMicromanaging the paperwork in the first year will allow more detail into what to expect and when it shows trends.

References

David, F. R., David, F. R., & David, M.E. (2019). Strategic management concepts and cases: A competitive advantage approach (17^th ed.). [Adobe Digital Editions version]. Retrieved

from https://www.gcumedia.com/digital-resources/pearson/2019/strategic- management_a-competitive-advantage-approach-concepts-and-cases_17e.php

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The Importance of Projecting the First-Year Financial Performance Monthly

Why is it important to project the first-year financial performance monthly and the subsequent yearly budgets every quarter? Explain.