One Question, Four Aspects

2 min read

How to check if the business plan is integrated

The ultimate question

Income statement

  • Personnel expenses reflect the number of employees. Thus, a significant change in the top-line goes in line with a change in the employer basis. Unless the company can adjust the capacity of its employees. This is something that you would need to discuss with the firm.
  • Other operating expenses should also move in line. Other operating expenses consist of a fixed and variable part. Take office rent as an example. Up to a certain capacity, the rent will stay flat but changes if a certain threshold is exceeded. Hence, other operating expenses also need to be in line with the top-line.

Assets

  • The number of shifts is increased,
  • some production is outsourced,
  • the equipment hasn’t been used to full capacity by now, or
  • an expansion is planned.

Working capital

Other liabilities

Key aspects

  1. Top-line developments impact expense lines
  2. Capacity topics could relate to assets, employees as well as rented equipment or offices
  3. Working capital reflects any changes made to the supply chain
  4. Expense items for liabilities or provisions should reconcile to the balance sheet

Final thoughts

Jan Mozer I am a finance professional and curious writer about startups, new business models, venture capital and Mexico.

Leave a Reply

Your email address will not be published.