Great Idea: Using Trend Data in Financial Reporting


Along with the template Financial Conditions policy, in the CBLD Library you can find an easy to use monitoring report template that reflects the trends approach outlined in this article.

When it comes to numbers and data, context matters. This is particularly important when we are talking about financial data; the context in which we place particular numbers helps us make meaning of those numbers. Over many generations, managers and accountants have developed financial reporting tools that help them do their jobs.

michael-healy-vBalance sheets, Income/Expense (aka profit/loss) statements, and cash flow statements are all excellent tools that can help managers manage. But on their own, these same financial statements do not necessarily help the elected board of a food co-op monitor the overall financial health of their business. Some additional analytic tools are needed to provide context and depth to help boards see the overall the state of their business—that then becomes the basis of sound governance decisions.

Michael Healy, CDS CC board trainer said, “So if you hear that one co-op did $1 million in sales last quarter, and another did $10 million, which would you say performed better? Maybe we know now that the answer to that question requires different information, a different context. We know now that we would ask of each: What did you expect? What does your sales growth trend look like? Did you perform as well as your peers? We know that, in order for us to decide whether $1 million is good or bad, we need context.” Healy believes that a handful of clearly-presented charts on key indicators can provide the information and context boards need in order to assess their co-op’s financial and operational health.

Along with the template Financial Conditions policy, in the CBLDLibrary you can find an easy to use template monitoring report that reflects the trends approach outlined in this article. The CBLD team has based its work on what it has learned by observing and supporting many co-op boards and managers over many years.

“Each of us wants our cooperatively owned business to make a positive difference in our community, and that is what this analytical work is all about,” Healy said. Understanding the trends and implications of past performance will assist co-ops to get better at planning for and creating the future that they want.

New! Improved! Financial Conditions Template Policy & Sample Financial Conditions Monitoring Reports

The July/August 2014 issue of the Cooperative Grocer will feature a full-length article on this topic by Michael Healy, “Context Matters: Using trends and comparisons to monitor the financial health of your cooperative.”

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By |July 2nd, 2014|Categories: Connections|Tags: , |

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