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Financial Year Transition – Part 1

April 2nd, 2012 · 1 Comment

As March gives way to April and one financial year transitions to the next, there are many things that happen in a business. It is a time of some looking back and a lot of looking forward.

To start with, one needs to do a comparison with the objectives for the year set a year ago, and what was done and what was left undone. Most companies work on an annual plan – with some revisions that take place through the year if situations change, and assumptions need to be revised. Financial targets set are one very important factor that need to be measured against achieved. For young businesses, topline and other metrics matter more. For somewhat more mature businesses, EBIDTA is the number to track.

Financial targets are important because the incentives and bonuses for many in the organisation are linked to these numbers. At the end of the day, numbers are what matter most.  While these numbers are tracked through the year, the year-end numbers are the ones that are cast in stone.

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