Hardware Retailing

SEP 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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HARDWARE RETAILING | September 2017 16 NRHA News A New, Easy Way to Understand Financial Statements I f you're a little confused by all the numbers in the financial statements of your business, you're not alone. Many retailers would rather be on the salesfloor helping customers than in the backroom poring over paperwork. Nonetheless, those financial statements contain valuable information about the health of your business. By identifying, for example, a lower than average transaction size, you can take steps to fix it and add thousands of dollars to your bottom line. If you want to run a successful business, it is critical you understand the story those numbers can tell you. NRHA wants to make sure all retailers are well informed about the financial health of their business. That's why your association is pleased to introduce the all-new training course in Basic Retail Accounting. This online course offers an introduction to the often-complicated topic of accounting by explaining the terms used in the two most common financial statements: the income statement and the balance sheet. The course also defines some of the most common basic financial ratios retailers can use to compare their operation against others in the industry. Basic Retail Accounting is ideal for business owners and any employees who are involved with financial management. "As we've talked with retailers, we've found there was a need for a course that explained how to read financial statements," says Dave Gowan, NRHA's director of finance and business services. "Anyone managing a retail operation needs to understand some of these basic accounting principles to make informed business decisions. The numbers are your best way of knowing if your business is doing well, if it's not and where the opportunities for growth are. The course also explains many of the numbers in NRHA's Cost of Doing Business Study, so retailers can better use this important tool." The Basic Retail Accounting course includes four modules with easy-to-use navigation, narration, user interaction and a printable study guide. There is no test connected with this course, so users will not need to log on to NRHA's LMS site. It is available on nrha.org to NRHA Training Members. To learn more about how to become an NRHA Training Member, contact Marci Taschler at 800-772-4424 or mtaschler@nrha.org. A Detailed Look at What This Course Offers Introduction to the Income Statement and Balance Sheet. This module first tackles the question of why it's important to understand financial statements and then offers a basic definition of each of the financial statements and the differences between them. It will also define the role each plays in helping you understand the financial health of your business. The Income Statement. This module explores the key terms you will find on the income statement, including net sales, cost of goods, gross profit, operating expenses, operating profit and net profit before taxes. By reading this statement, you will understand where you are spending your money and how much you are making. The Balance Sheet. In this module, you'll learn more about the three key numbers found on the balance sheet, including assets, liabilities and net worth. This statement can tell you a lot about how well you are managing your business and the total value of profit you have in it. Financial Ratios. After you understand the raw numbers that make up your financial statements, it's important to know how to use them to draw conclusions about your business. For example, how do you compare against similar businesses? How likely is a bank to loan you money? These ratios will help you develop a strategy for improving your operation.

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