Post by Samson Abayomi Olubode (@abayomi4sam)

As a finance person, whenever I look at the financials of SMEs, these are the things my eyes checks
Revenue - Are you making money? Is the revenue growing at a reasonable rate from period to period?
Errors - Are there any flags that suggest errors or foul play in the account?
Is the Gross profit margin and EBITDA making sense? Is the cost of sales not eating too much of the profit made?
Net profit margin: Is OPEX not taking it all? Is depreciation and amortization not excessive? What are the highest operating expenses, and can they be managed?
Cash collection efficiency: Is revenue turning to cash or cash is being tied up with customers?
Inventory: Is the company not tying down money in inventory or they are really investing in inventory to hedge?
What is the ratio of current assets to current liabilities?
Is the debt to equity not overboard when compared to the industry benchmark?
What is the ratio of the profit percentage compare to the asset and capital invested?
Is company getting desired or reasonable revenue to the marketing and sales cost?

It's a long analysis.

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