Managing by the Numbers: Monitoring Your Firm's Profitability

The purpose of this book is to help you analyze your firm's operations in an effort to attain and maintain an appropriate level of profitability. Simply generating periodic financial statements is not enough; you should continually monitor and periodically analyze your firm's financial statements in order to evaluate your operations and the source of your profits. Methods of evaluating operations include both monitoring trends within your own firm by comparing the results of current operations to historical data, and assessing your own firm's performance by comparing it to external benchmarks, such as those provided by industry averages or statistics specific to other firms.