About financial review

At times, financial information is easier to understand when presented in the form of a chart. Sage 100 Contractor can generate charts for you from data in the ledger accounts of the active company. You can then use the charts to review and analyze trends in your company.

You can generate charts on financial data from the current fiscal year, or as a comparison between the current and last fiscal year, for 12 rolling months, or as a comparison between the budgeted costs and actual costs. In addition, you can create line, area, 2-dimensional bar charts, and 3-dimensional bar charts.

After generating a chart, you can print it, save it to file, or copy it to the clipboard so that you can paste the chart in another report or document.

Note: On 13-1 Financial Review, when viewing charts, be aware that Mean, Standard Deviation, and Best Fit do not display with bar charts. The statistical methods display as expected only with line and area charts. When working with these statistical methods, select Format > Line or Area, and then select Statistics > Mean, Standard Deviation, or Best Fit.

Financial review—Ratios

Sage 100 Contractor uses the ledger account balances to create the ratio for a fiscal period. Use the ratios to identify long term trends or potential problems.

The following list provides definitions of menu items under 13-1 Financial Review > Ratio:

• Current Ratio—Measures the relationship between the current assets and current liabilities.
  Definition of Current Ratio: Current Assets/Current Liabilities by fiscal period.
• Quick Ratio—Measures the relationship of liquid assets to current liabilities, indicating the short-term debt paying ability.
  Definition of Quick Ratio: (Current Assets – Inventory)/Current Liabilities by fiscal period.
• Gross Profit/Sales—Measures the relationship between gross profit and sales dollars.
  Definition of Gross Profit/Sales: (Gross Profit + Other Income)/(Total Operating Income +Other Income) by fiscal period)
• Net Profit/Sales - Measures the relationship between net profit and sales dollars.
  Definition of Net Profit/Sales: Net Income Before Tax/ (Total Operating Income + Other Income) by fiscal period.
• Net Profit/Equity—Measures the amount of income earned for each dollar invested.
  Definition of Net Profit: (Operating Income + Other Income) – (Direct Expense + Equip/Shop Expense + Overhead Expense + Admin Expense).
  Definition of Equity: (Equity + Operating Income + Other Income) – (Direct Expense + Equip/Shop Expense + Overhead Expense + Admin Expense). Note: The Equity amount excludes Owner’s Draw accounts.
• Current Assets/Total Assets—Measures the relationship between the short-term assets and long-term assets.
  Definition of Current Assets: Cash + Current Assets + WIP.
  Definition of Total Assets: Cash + Current Assets + Wip + Other Assets + Fixed Assets – Accum.Depreciation.
• Return on Assets—Measures the earning power or the profitability of a company’s assets.
  Definition of Return on Assets: Total Income—Direct + Shop/Equip + Overhead + Admin Expense / Cash + Current Assets + Wip—Accum. Depreciation.
• Debt/Worth - Measures the relationship of debt financing to equity financing, or how much a company is leveraged.
  Definition of Debt: Total liabilities.
  Definition of Worth: Equity + Total Income—(Direct + Shop/Equip + Overhead + Admin Expense).
• Debt/Assets—Measures the percentage of total assets represented by liabilities.
  Definition of Debt: Total liabilities.
  Definition of Assets: Cash + Current Assets + Wip + Other Assets + Fixed Assets—Accum. Depreciation.
• Overhead/Direct Expense—Measures the relationship of overhead expenses to job expenses. Total Indirect Expense/Total Direct Expense.
  Definition of Indirect Expense: Overhead + Administrative Expenses.
  Definition of Direct Expense: Direct +Equipment + Shop Expenses

Financial Review—Trends

Sage 100 Contractor uses the ledger account balances to graph financial trends.

The following list provides definitions of menu items under 13-1 Financial Review > Trends:

• Cash—Charts the balances for all accounts in the cash range by fiscal period.
  Compares to the 2-4-21 General Ledger report by cash account range and period.
• A/R—Charts the Accounts Receivable balance by fiscal period.
  Compares to the dedicated Accounts Receivable account in 1-7 General Ledger Accounts.
• A/P—Charts the Trade Accounts Payable balance by fiscal period.
  Compares to the dedicated Accounts Payable account in 1-7 General Ledger Accounts.
• Sales—Charts the total income.
  Compare to the Income Statement by period for the Operating Income balance + Other Income balance.
  Budget numbers by period: compare to menu 1-7 General Ledger Accounts income accounts budgets.
• Gross Profit—Charts the Gross Profit + Other Income by fiscal period.
  Compare to the Gross Profit + Other Income from Income Statement by period.
  Definition of Gross Profit: Operating Income – (Direct Expense + Equip/Shop Expense).
• Net Profit—Charts the Net Income before Tax by fiscal period.
  Compare to the Net Income Before Tax on the Income Statement by period.
  Definition of Net Income: Operating Income + Other Income – Direct & Indirect Expenses.
• Breakeven Point—Charts all Expenses by fiscal period.
  Compare to the Total Direct & Equip/Shop Expenses + Total Indirect Expenses on the Income Statement by period.
• Working Capital—Charts Current Assets – Current Liabilities by fiscal period. This trend is often used to secure a line of credit.
  Compare to the Balance Sheet by fiscal period.
  Budget comes from all current assets and liabilities accounts in menu 1-7 General Ledger Accounts.

Financial Review—Statistics

When generating charts, you can use one of the statistical methods provided:

• Mean: Calculation derived from the sum of a list of numbers divided by the total number of numbers in a list.
• Standard Deviation: Calculation indicating how spread out numbers are from the mean.
• Best Fit: Calculation showing a trend line indicated by the values in a series.