The viability of the business can be determined, if the progress of the any business is established.A business will be seen to be inexistence if it has the ability to meet its operating costs as well make some profits.The profits made by the business are returned to the business for further investment.Through this profits it will be possible to expand for the business to expand its products or open into new area.The success of the business if by careful analysis of the statement of the business rather than the mere look of the structures of the business.The decision on the viability of the business will be based on this information.To assess the progress of the business you need the financial decision making tools. The tools will serve to give you an accurate picture about the performance of the business.The financial statements, ratios and other are the tools.
The financial statements are for instance the balance sheet ,income statement and statement of cash flow.The use into which the resources were put can be determined by the help of this statements, thus will be of good in making a budget for the business.It also important to note that the liabilities in the business will be used to determine the debt profile of the business.This will help the business to devise the important mechanisms of reducing the level of leverage with the business.The income statement serves to determine the amount of profits made by the business.From the income statement we can be able to determine the expenses that take a larger portion of the income that is generated by the business.
In decision making also the ratios serve also as an important tool.It is important to note that there are different functions for the different ratios, for example the liquidity ratios are used to determine if the business can meet is obligations when they fall due.It is important to note that the ratios are used to find whether the a business has a sound financial base.If the business through the ratios determine that there is a problem with it finance it will take necessary measures to curb the situation from worsening.Comparison of the business with other similar business will be made possible by the use of the ratiosDetermination on how to be competitive is possible by this comparison.
The other crucial tool for decision making is the forecasting.The future sale to be made can be determined by forecasting.To meet the expected sale forecasting will be important in a acquiring the necessary resources for the same.
The important too to use when finding where to invest is the investment analysis.This tool will help one to identify those projects that are in market thus will in the long run reap profits for the organization.