Examining Company before BSC- Other processes to be examined in financial status analysis

Some of the other processes that are included in the financial status analysis are- Cash Management and Working Capital Management. This helps in aligning the financial resources with the objectives. This would help in ensuring that enough cash is there in hand to meet the current liabilities. Working Capital is needed to make sure that there is enough liquidity in the operations. A number of companies provide these services. Working capital is calculated as Current assets- Current Liabilities.

• Return to the Examining the company before Balanced Scorecard implementation

A healthy working capital management is needed to continue the operations side by side satisfying both short term debts (maturing ones) and upcoming operational expenses. Basically, working capital management comprises – Cash Management, Inventory Management, Debtors Management and Short term financing. The aim of working capital management varies from organization to organization. What the purpose for a particular organization is, has to be there in the corporate strategy of the group. Some of the indicators that can be used in knowing the progress of this task are:

• Days for which sales are held outstanding
• Days for which inventory is held outstanding
• Days for which payables are held outstanding

This is possible with developing successful strategies to manage short term liquidity, evaluate and manage the costs hat go into managing working capital. Also, one should adopt a global approach to this issue, integrate investing with borrowing, information management along with forecasting and enhance the conversion of account receivable to cash

Summary: This part of the Balanced Scorecard Toolkit is a guide on how to examine company before Balanced Scorecard implementation in order to collect necessary data for future Balanced Scorecard Design and Implementation.