Which key figures are particularly important in the annual financial statements?
September 7, 2023 | 40,00 EUR | answered by Jens Meier
Dear tax advisor,
my name is Gerald Fritsche and I run a medium-sized company in the mechanical engineering industry. As I am currently working on my annual financial statements, I have some questions regarding the key figures that should be included.
So far, I have mainly focused on revenue, profit, and costs, but I am wondering if there are other key figures that I should consider in order to get a comprehensive picture of the financial situation of my company. In the past, I have found it difficult at times to interpret the numbers correctly and draw the right conclusions from them.
My concern is that I may be overlooking important key figures that could help me better understand the financial health of my company and take measures to improve it if necessary. I want to ensure that my annual financial statements not only are formally correct, but also provide me with valuable information to make informed decisions and successfully lead my company.
Could you please tell me specifically which key figures are particularly important in the annual financial statements and how I should interpret them? Are there specific key figures that are relevant specifically for the mechanical engineering industry? And what measures could I take to improve the financial key figures of my company?
Thank you in advance for your support.
Best regards,
Gerald Fritsche
Dear Mr. Fritsche,
Thank you for your inquiry and your interest in a comprehensive analysis of your financial statements. It is very important to know and interpret the right key figures in order to make informed decisions for the future of your company. Below, I will provide you with a selection of important key figures for your financial statements and explain how you can interpret them.
1. Liquidity ratios: Some of the most important key figures include the current ratio and the quick ratio. The current ratio indicates how well your company can cover short-term liabilities with current assets. The quick ratio also takes into account short-term debt. These key figures are particularly important to ensure that your company is able to meet its financial obligations.
2. Profitability ratios: These include the return on equity and the return on capital employed. The return on equity shows how efficiently your invested equity is working, while the return on capital employed reflects the profitability of the total capital employed. These key figures help you assess the profitability of your company.
3. Debt ratios: Relevant key figures include the equity ratio and the debt ratio. The equity ratio indicates the proportion of equity in the total capital, while the debt ratio shows the proportion of debt in the total capital. These key figures are important for analyzing the financing structure of your company.
For the mechanical engineering industry, additional key figures such as inventory turnover ratio and productivity per employee may be relevant. The inventory turnover ratio indicates how quickly your inventory is turning over, while productivity per employee provides insight into the efficiency of your workforce.
To improve the financial ratios of your company, you could take measures such as cost reduction, improving liquidity, or increasing profitability. It is important to regularly analyze the key figures and make adjustments as necessary to ensure the long-term financial health of your company.
I hope this information is helpful to you and that you can make informed decisions for the future of your company with a comprehensive view of the key figures in your financial statements. If you have any further questions, please feel free to contact me.
Best regards,
Jens Meier
