Evaluating Board Finances Part 2: Financial Ratios and Dashboards - Key tools in assessing trends and spotting warning signs
Typically, at board meetings, directors are presented with a monthly board pack, containing the management accounts of the entity as well as supporting documentation, such as financial ratios and KPI’s.
However, not every board member finds it easy to read and interpret a page full of numbers, including financial ratios, KPIs and computer generated spreadsheets.
A popular trend being used by more and more boards is the presentation of financial information in the format of a financial dashboard, where key trends and data are presented in a more visual using pie and bar charts. This visual presentation can often allow for easier identification of trends, warning signs and alarm bells.
The purpose of this webinar is to explain how financial ratios relevant to an entity are calculated and provide some tips on how this information may be presented using a financial dashboard.
Specifically, this webinar will cover:
- Calculation of key financial ratios where the entity’s liquidity, operating performance, financial stability and profitability will be assessed over a number of years.
- Drawing conclusions as to what the ratios are telling us.
- How a financial dashboard may be created for the board of directors for presentation at their board meeting using the key financial ratios identified in Part 1 above.
For this series to be of most benefit, we suggest you have a basic level of understanding of what to look in your board financials. For a ‘starting’ level of board finance please consider Financial Fundamentals for Business Owners. Please contact Webinars@aicd.com.au for a package offer on these two series.
DPD Units = 5
Lecturer, QUT Business School