Whiz Consulting, an accounting firm in the US, has made quality additions to its accounting services. They have taken that up a notch by introducing a tailor-made financial ratio analysis service. According to the firm, the latest services will provide business owners with a competitive advantage over their competitors.
Through this addition, the company also wants business owners to get acquainted with the measures taken by the accountants to do a proper analysis. They want businesses to get the hang of how a financial analyst takes numerous steps, including confirming financial data correctness before creating a ratio analysis. According to them, it will avoid failure due to incorrect data and ineffective analysis and better understand the business owners and accountants.
The newly introduced ratio analysis service also focuses on making the process easier for accountants. As per the firm experts, "Ratio analysis is a complex process by which an accountant turns financial numbers into ratios to compare them to prior years' ratios and those of competitors. We wanted to make that procedure easier for the accountants so they can effectively communicate with the business owners about their analysis report." The experts also stated that the service would include many new features that will help improve the company's efficiency.
The experts also believe that management and shareholders may use these ratio analysis tools to examine and evaluate their company's performance to see whether it is profitable and worth investing in. The ratio analysis allows management or investor to assess the performance of a business as a whole and have a deeper understanding of many areas of its operations.
When asked about it in detail, one of the accountants explained, "Inventories turnover and sales turnover ratios are examples of ratios that may be used to determine how successfully a firm is utilizing its resources and assets to produce sales or reduce inventory. If these ratios are greater, the firm is more efficient; however, if they are decreasing over time, it might indicate that inventory is gradually building, the commodity is becoming obsolete, or the sales and marketing strategy is weak, among other things."
The firm also explained how their financial ratio analysis services would help businesses improve their market performance. According to the firm, the benefits include various ratios that will help determine if a company is overvalued or undervalued in relation to its competitors or if an investor should add the stock at the current level of risk. It will also help management determine how its success relates to its stock price and what type of future strategy should be pursued.
Why was the introduction of tailor-made ratio analysis services necessary? When asked the same question to the company, one of the sources added that it was essential to overcome inflation and analyze future trends. Businesses can now use ratio analysis to demonstrate production trends. This provides them the ability to forecast future trends. The firm may forecast the future by using the ratios from the previous year. It provides a basis for budgeting and determining the best approach for business success and development.
An accountant from the firm explained, "Financial analysis, which is an important element of company planning, includes ratio analysis. In other words, as the fundamental instrument in business planning, ratio analysis is the foundation of SWOT (Strengths, Weaknesses, Opportunities, and Threats). Because SWOT is based on ratio analysis, understanding a company's financial status is critical for ensuring fair resource allocation."
Based on the research done by the company, they said that even though financial ratio analysis is a common financial analysis approach for businesses, tiny businesses, there are not many accounting firms that provide this service. They believe that "more and more accounting firms should be employing this service into their accounting solutions to make the work easier both for the accountants and the business owners. We have reached far from practicing manual accounting, and it's time we introduced all kinds of digital accounting services to our firms." The company is about to introduce other services that they believe will strengthen the foundation for their clients.