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Strategic Planning: Plot and Analyze Three-Year Trends and Ratios

Armed with information about how to calculate financial ratios for your strategic plan, you want to set up a spreadsheet that shows financial trends ideally for the past few years. If you don’t have complete financial data, put together ratios for the years that you do have information on.

Using a spreadsheet, follow these steps to get started. The figure shows a financial ratio worksheet example, using benchmarks to identify areas of improvement.

  1. List financial ratios down the left-hand side and the three years across the top.

  2. Calculate each ratio for each year based on the formulas provided in the previous sections.

  3. Label the farthest column to the right (the one after the most current year) “Benchmark.”

  4. Enter the benchmark number based on the few recommended levels provided in the previous section, your desired targets, or industry benchmarks.

  5. Identify which ratios are performing above or below the benchmark.

  6. Determine possible corrective action and list your ideas in your notes.

    Determine corrective action based on ratios that may not be close to your benchmark or your target.

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