Make Sure You Are Not Losing Money! Check Out These Key Financial Factors ASAP
Are you actually making money online? Financial analysis helps us understand how your shop is performing. There are two parts to a financial analysis: the statement of operations and the balance sheet. The statement of operations tells us how much money (or loss) your shop is achieving based on current sales and costs. The balance sheet tells us how many assets the firm has to support its current and future operations. Here are some of the key factors to look for in your shop’s statement of operations: 1. Revenues: Are revenues growing and at what rate? Many e-commerce companies have experienced impressive, even explosive, revenue growth as an entirely new channel is created. 2. Cost of sales: What is the cost of sales compared to revenues? Cost of sales typically includes the cost of the products sold and related costs. The lower the cost of sales compared to revenue, the higher the gross profit. 3. Gross margin: What is the firm’s gross margin, and is it increasin