Financial Analysis - A New Methodology This lesson is a prerequisite for LESSON 3b. The resource material from this lesson is used in both lessons. It seems that all of us attack the task of analyzing financial statements in a different way. Sometimes, we even look at different companies in different ways. This seemed to work for me as well for a while. At least until I started to look at more sets on a frequent basis. I needed a way to quickly look at any company in a consistent manner to get a feel for its overall health, or compare it to others in the same industry. Because of this need, I developed a methodology that covered both the income statement and the balance sheet, looking at all aspects of financial health. The result was a simple dashboard of 5 metrics, called Initial Financial Indicators or (IFI's). This dashboard became the basis of how you can look at any company quickly. It can be sued to run your company, be an agenda for talking with your clients, or to find a diamond in the rough when its time to make a company purchase. The process worked so well, I used it to manage my own businesses, and is the foundation for my most popular seminar called the "7-minute Conversation". In this lesson you will learn: The five metrics you should look at every month to evaluate the financial health of a company. The most important rule of cutting expenses that will keep your company alive, even in the bad times. How the banker and the accountant can give you opposite advice and how to make the decision about which one is right for your business. To calculate how much long term debt your company can service, so you always know how much you could borrow. To determine is your company is mis-financed and how to fix it before you lose too much cash. Remember, Lesson 3 and 4 use the same resource material and scenario content to support the concepts being taught.