Returning Value Blog

Financial statements tell only part of the story. Investors, lenders, and other stakeholders who know how to identify red flags of impending problems can protect their own financial interests. Additional due diligence may be needed to uncover these issues. For instance, stakeholders might need to talk to management, visit the company’s website and compute financial benchmarks using the company’s most recent financial statement. Here’s what to look for.

Financial statements look at historical performance. But there are times when you want forward-looking reports to help your business make strategic investment decisions, evaluate the viability of a turnaround plan or apply for a loan. Your accountant can help ensure the assumptions underlying prospective financial statements make sense in today’s volatile marketplace.

Adding a new partner in a partnership has several financial and legal implications. Let’s say you and your partners are planning to admit a new partner. The new partner will acquire a one-third interest in the partnership by making a cash contribution to it. Let’s further assume that your bases in your partnership interests are sufficient so that the decrease in your portions of the partnership’s liabilities because of the new partner’s entry won’t reduce your bases to zero.

Convergence of the Industry

The automotive industry is experiencing a convergence of disruptions unlike any seen since 1910. Autonomous, connectivity, electrification, mobility, and subscription business models are reshaping the automotive industry and creating a frenzy of activity.

If your business doesn’t already have a retirement plan, now might be a good time to take the plunge. Current retirement plan rules allow for significant tax-deductible contributions.

Millions of people are unaware of how their personal data is being collected, used, or shared in our increasingly digital society. As a business, it’s more important than ever to have a data privacy strategy to protect customers and employees and remain compliant with applicable regulations.

2021 was the first full year that the global economy cycled through the pandemic. What were the predictions going into 2021, and where did we actually end up? Here we take a look at how the real estate and construction industries fared last year and where they’re headed in 2022.

Inflation vs. Inflationary Pressure

Concerns about the elevated inflationary environment continue to persist. There are numerous contributing factors, such as a rapid increase in wages, energy prices, and an imbalanced global supply chain with demand vs. supply for many goods and services far from equilibrium. To better understand these factors, it is essential to first distinguish inflation from inflationary pressure. Inflation is typified by a sustained increase in the general price levels in an economy, while inflationary pressure is described as either a leading indicator of actual inflation or temporary pricing increases due to isolated or short-term events.

Forecasting key business metrics — such as sales demand, receivables, payables, and working capital — can help you reduce excess inventory and other overhead, offer competitive prices, and keep your business on solid financial footing. Although historical financial statements are often the starting point for forecasts, you’ll need to do more than just multiply last year’s numbers by a projected growth rate, especially in today’s uncertain marketplace.

Forecasting how your company is likely to perform over the next year can be challenging, especially when it’s unclear where the markets are heading. But accurate forecasts are critical when managing a business. For example, they may be used to order inventory, hire additional workers, apply for loans and credit lines, and evaluate investment alternatives.