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WJH ProfitCents Reports FAQ
1. What is a
WJH ProfitCents Report?
2. Are the reports available for both business and personal
financials?
3. Could you provide some examples of complete reports?
4. Do you provide any help in understanding the contents
of the report?
5. How do I get a personalized
report?
6. What does it cost to have a report prepared and presented?
7. Can I receive a report on a regular basis with my financial
statements?
If you have any other questions, please
contact us.
1. What is a WJH
ProfitCents Report?
A WJH ProfitCents Report
is a custom report that presents your financial data in an
easy to understand format using plain-language text, a scoring
system, and graphics. It provides an analysis of your
business based on both a standalone analysis of its financials
and also as a comparison with the financials of similar
businesses in the same geographical area. The report
highlights the strengths of the business and the areas where
improvements could be made. It also may suggest specific
actions you should consider taking.
While there are
several different reports that can be created, we most often
use the "ProfitCents Extreme" Report. This report consists
of a scoring section with a text and graphics explanation of each
of the scores and some suggested actions.
The report covers six key
areas that are scored with either 1 to 5 stars (as shown below) or on a scale
of 1 to 100 depending on your preference.
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Liquidity
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Borrowing
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Profits & Profit Margin
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Assets
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Sales
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Employees
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Each area is then discussed
as shown in the following from an example.
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Generally, what is the company's ability to meet obligations
as they come due?
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The company has a good overall liquidity position this period.
In fact, it is even better that all of the firm's major
liquidity indicators are moving up. In this key area,
trends are even more important than raw data because liquidity
is generally such a quickly changing condition.
It is positive that the company's cash and near-cash assets
have grown relative to short-term obligations. This is particularly
important because the company had slightly too much liquidity
tied up in non-cash assets last period. It might be a good
time to make more "investments" in these highly liquid accounts.
One negative trend that might hurt liquidity in the future
is the decline in the firm's net profit margin, which will
be discussed in the next section. For now, it is important
to note that net margins direct long-term liquidity in the
company. The Income Statement and the Balance Sheet influence
each other from this perspective.
The company's accounts payable days ratio is low, but its
inventory and accounts receivable days ratios are average
or normal. This means that the company is paying vendor
accounts early but collecting cash in a more normal manner.
It is a minor point, but in many cases, companies should
not pay vendors earlier than they are collecting revenues
from customers.
There are many basic ways to improve cash flow and liquidity
in the business. Some possibilities follow: 1) Review
accounts receivable monthly and take aggressive action to
collect "bad" accounts. Generally, there are almost always
ways to be more aggressive in collections without losing
customers. 2) Use as much trade credit as is possible and
reasonable. 3) Increase/get a line of credit from the bank.
4) Offer different credit terms to different customers.
It is often counterproductive to give the same credit terms
to all different types of customers. For example, why provide
credit to those customers who might be indifferent to it?
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The report also includes a
section that shows up to 12 metrics, explains them, and compares
your entity's numbers to similar companies' numbers. This
is the "Industry Scorecard". The following example shows
the information for the Current Ratio of our sample company.
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INDUSTRY
SCORECARD
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Financial Indicator
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Current Period
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Industry Range
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Distance from Industry
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Current Ratio
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2.84
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1.40 to 2.00
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+42.00%
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= Total Current Assets/Total Current Liabilities
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Explanation:
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Generally,
this metric measures the overall liquidity position
of a company. It is certainly not a perfect barometer,
but it is a good one. Watch for big decreases in this
number over time. Make sure the accounts listed in "current
assets" (numerator) are collectible.
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2. Are the reports
available for both business and personal financials?
Yes. The business report
uses business ratios and the comparisons to like businesses use
similar businesses (the same NAICS code) in the same geographical
area. The personal reports are based on metrics more suitable
to personal finances and the comparisons are done to individuals
with similar job titles in the same geographic area.
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3. Could you provide
some examples of complete reports?
Yes. Click on the following
links for sample reports.
If you would like a printed
copy of a sample report, please contact
us.
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page.)
4. Do you provide
any help in understanding the contents of the report?
Yes, we analyze the results
and then meet with you to discuss the areas that are of specific
interest or concern.
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page.)
5. How do I get a
personalized report?
If you are a client of WJH
we most likely have all of the information we need to create a
report. Simply contact us to let us know you would like
a report.
If you are not a client of
WJH there is an online form where you can provide the information
for creating the report. The online service includes the
report and a 1 hour face-to-face or telephone meeting with a CPA
to discuss the report content. The fee for this service
is $225. To access the online order form click
here.
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page.)
6. What does it cost
to have a report prepared and presented?
If you are not a client of
WJH, the fee is $225 for a report and a 1 hour meeting (or telephone
conversation) to discuss the report.
WJH clients receive significant
discounts depending on the level of service we provide in addition
to the report. Contact us
for a specific price.
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page.)
7. Can I receive
a report on a regular basis with my financial statements?
Yes, just let us know you
want it. The fee ranges from $0 to $150 depending on the
level of accounting services we are currently providing.
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page.)
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