Urban Thought Collective

The other day on the way to drop off an express mail package I saw the craziest thing. As I turned the corner I saw a cute little squirrel in the middle of the street. I thought to myself, “I should slow down so the squirrel can navigate his way across the road in front of me.” As I approached, he stood his ground and when I was almost even with the squirrel he started chasing my car.

YES! The squirrel started running along-side my car like you see dogs doing from time-to-time. Laughing hysterically, I swerved and almost ran my car off the road.

When I gained my composure and avoided the potential casualty I looked in my rear-view mirror. In the middle of the road again was that cute little squirrel, mocking me and preparing himself for the next potential victim.

Thank goodness I did not have to explain this accident to my insurance agent.

You’re thinking, squirrel?

Well, obviously this animal thought I was invading his space.

Where are you on the food chain?

Do you understand where you stand at your company, how the budget affects your division or even how to read your company’s financial statements?

This segment is devoted to those employed at large enterprises and companies. In the second part of the series I’ll devote attention to non-public enterprises.

If you work for a U.S. company that is publicly traded, much of the financial data is readily available via the Internet at the U.S. Securities & Exchange Commission’s website. Also, public companies have an “investor section” on their websites which includes required public filings there as well.

So where do I start?

If you are not part of the team responsible for reviewing financial information including company-wide budgets, acquisition strategies, new-business lines or products, you might want to first start by perusing 8-K filings.

8-K documents are filed with SEC for significant events affecting your company. Events warranting a report filing would include changes in the executive suite such as CEO or CFO, regulatory matters, division spin-offs, merger/consolidation announcements, etc…

I suggest starting your review with the 8-K filings because they tend to give you a big-picture perspective of what’s going on with your employer. You might know part of the puzzle relevant to your department or small division, but these reports provide more insight to what information is being shared with the public.

Ready to visit the numbers?

My next suggestion is to peruse the 10-K annual reports for the past couple of years. These reports provide your company’s annual consolidated financial information along with footnote explanations, your external CPA firm’s report and again a big-picture of what your company is doing.

The best place to start is to review the segment at the beginning that discusses the business to see if the description is consistent with your understanding of who and what you do as a company.

The key reports you want to peruse are the consolidated balance sheet, consolidated income statement and consolidated statement of cash flows, which would have comparable figures from the prior year. If you start here this will provide an overall idea of where your company is (financial position), what was generated in revenues, net profits, earnings per share and other relevant business ratios and what was done with your cash.

If your company’s data is shared internally (and especially if it is broken down by sales department) you can also check out some calculations yourself such as gross revenues as well as net profits per employee. Check out to see if your company’s numbers have improved and if there have been significant downsizing.

There are a number of other reports that might be helpful including the 10-QSB (the quarterly report filings with SEC) as well as Form 4 (a statement of changes in beneficial ownership of securities).

Take away

Next month we will explore more details about checking out your company’s financials.

Hopefully the take away for this segment is that you become more familiar with major events affecting your company, review current and historical profits, department consolidations and acquisitions.

Pay close attention when the “numbers” people in your company make presentations. If you have a better understanding of how the company’s activities will affect your department and eventually your personal bottom-line you might feel more engaged or inclined to help come up with improvements.

Genevia Gee Fulbright, CPA is President & COO of Fulbright & Fulbright, CPA, PA, a business strategist, tax advisor and author of Make the Leap: Shift from Corporate Worker to Entrepreneur and most recent book Make the Leap: From Mom & Pop to Good Enough to Sell (Infinity Publishing). Her sound financial planning advice tips can be read regularly on www.urbanthoughtcollective.com. Visit Fulbright at www.makeleap.com.