Author Topic: Guide to analysing financial statements  (Read 319 times)

centastic

  • 5 O'Clock Shadow
  • *
  • Posts: 25
Guide to analysing financial statements
« on: November 24, 2018, 06:59:30 PM »
Hi - anyone have a suggestion for a general list of things I should be looking out for when evaluating a small business for purchase?

eg

- large unexplained increases/decreases in YOY costs or revenue
- a decrease in electricity cost that cannot be explained by low-energy lighting/solar (could be an indicator of less being produced)
- revenue growth YOY of "inflation plus 6%" is good growth for a bricks-and-mortar business with no online sales.
- verify with tax records

etc.

Often irregularities will jump out at me, but I don't have a list that I go down and check things off but I imagine there is something out there.

The business I'm currently evaluating and fulfills maintenence contracts for specialised equipment organisations.