How will managers use financial information to predict outcomes in business?

"Finances" in business looks at past, present, and future expenses to operate, profits/loses (known as P%26amp;L). Included are, salaries, cost of products, profit margins, lease or payments on building, utilities, employee expenses (outside sales people), benefits company pays, workers comp insurance payments, supply costs, lease of equipment, every outgoing expense of the business compared to "profits". Also, businesses will have independent CPA services, possibly attorney fees for various reasons, travel, etc.





Why? Managers are responsible to create, maintain budgets (predictions) based on past performance and expected future growth. Finances are the basis for "goal setting", "numbers" to "shoot for" to remain "profitable".





Financial reports are used to "gauge" necessary "moves" or "steps" within the business. These may include, increased "quotas" for sales people, increasing or decreasing employees, percentage of income increases, if any at all, to increase margins on products distributed, what to maintain in inventory or supplies, what equipment to keep or upgrade, etc. Management can also view what department or area is most or least "profitable" and/or decisions to maintain these employees or "source out".





Finances can determine if current client "market" is an advantage to maintain or not, going into other areas of sales or services, etc. Easy to see what products and services are most "profitable".|||Don't cheat!!! UOP student.... lol

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