Running Microsoft Office 2000

After you create a Financial Manager database using information from your accounting files and Outlook contacts, you can evaluate the data using the Report Wizard and Chart Wizard commands on the Financial Manager menu. (The Report and Chart buttons on the Financial Manager worksheet start the same wizards.) Using the Report Wizard, you can create a balance sheet, cash flow statement, ratios report, and other useful worksheets. Using the Chart Wizard, you can create graphical versions of the most common reports— the perfect embellishment for a shareholder's meeting or annual report.

Using the Report Wizard

The Report Wizard creates a workbook that contains summary information that you can use to assess the financial health of your business at different times. You can create the following reports using Financial Manager:

• Balance Sheet Report—Creates a combined statement of your company's general health by listing current assets, liabilities, and stockholder's equity.

• Cash Flow Report—Details your company's cash inflow and outflow.
• Income Statement Report—Analyzes your company's profit (or loss) performance by summarizing your revenues and expenses for a specific period of time.
• Ratios Report—Lists important financial ratios as a test of your company's seaworthiness.
• Sales Analysis Report—Builds a pivot table report analyzing sales, expense, gross profit for different parts of your business, or all three.
• Stockholder's Equity Report—Evaluates how much of the company your stockholders own and how much is owned by creditors.
• Trial Balance Report—Creates a detailed history of the balance and net change for each of your company's accounts.

NOTE

The following steps show you how to create a Cash Flow Report, a typical financial-analysis tool that many small businesses use to track income and expenses:

1. Choose Report Wizard from the Financial Manager menu.
2. Click Cash Flow in the Financial Reports list box.
3. If the current (selected) database isn't the one that you want to use for your report, click the Browse button and select a new one.
4. Click Next to begin the report. If Financial Manager prompts you for a username and password to access the database, enter them in the Database Login dialog box, and click OK.
5. Click a cash flow report in the Report Types list box, and then click Next.
6. Specify an end date for the cash flow report in the End Date For The Report box. If you selected Rolling 12 Period Trend With Projections, click the number of periods for which you want to project cash flow using the Number Of Periods For Projections box.
7. If you selected a cash flow report with scenarios, click Next, and in the What-If Scenario(s) To Include In The Report list box, click the scenarios that you want to use. You can select more than one scenario by holding down the Ctrl key while clicking.
8. Click Finish to finalize the cash flow report.

   Financial Manager creates the report in Excel, which lists the net cash flow for your business from operations, investments, and financing activities over the time period you requested. This type of cash flow report is quite valuable— it quickly points out any hidden cash flow problems in your business and also gives you a solid idea of net income during the given time period. Note that negative values in the report are shown in red, and changes in what-if scenarios are shown in light blue.

TIP

If the Date box in your report mentions that your cash flow report is now out of date, choose Recalculate Reports from the Financial Manager menu to update the report with the most recent information in your database.

Using the Chart Wizard

The Chart Wizard gives you the opportunity to see important developments in your business graphically. You can create the following charts using the Financial Manager Chart Wizard:

• Balance Sheet Composition—A chart containing data about your company's assets, liabilities, and equity for the month you request.
• Cash Flow Trend—A line chart that shows detailed cash flow data from operations, financing, and investing activities.
• Revenue-Expense Trend—A line chart that shows trend lines for sales, cost of sales, gross profit, operating expenses, and net income after taxes.
• Sales Composition—A pie chart showing how each customer, product, salesperson, or other sales category contributes to total sales, cost of sales, or gross profit.

The following steps show you how to create a Cash Flow Trend chart using the Chart Wizard. You can quickly determine your company's short-term financial health by creating a clear line chart that shows trend lines for important cash flow activities.

NOTE

1. Choose Chart Wizard from the Financial Manager menu.
2. Click Cash Flow Trend in the Financial Charts list box.
3. If the current (selected) database isn't the one you want to use for your chart, click the Browse button and select a new one.
4. Click Next to begin the chart. If Financial Manager prompts you for a username and password to access the database, enter them in the Database Login dialog box, and click OK.

   The Chart Wizard lists the types of cash flow activities that you can add to your cash flow chart. These include Operations, Investing, Financing, and you can also create a Cumulative chart showing all three trends together.

5. Click the cash flow activities that you want to include, and then click Next. (You can include one or several types.)
6. Specify starting and ending dates, and then click Finish to create the chart.

   Excel builds the cash flow chart in the manner you specified and presents a line graph showing cash flow in monthly increments (computed in dollars). You'll find that positive or negative cash flow values are dramatically apparent in this chart, as well as general trends in your cash inflow and outflow. Note that lines moving upward (to the right) indicate positive trends in cash flow, and lines moving downward (to the left) indicate negative trends in cash flow. (Look out for these!)

By using a combination of Financial Manager reports and charts, you can quickly spot trends in your accounting data that might have been difficult to spot otherwise. In addition, the order and polish of these documents makes them quite handy for the materials a small business owner often needs to produce, including quarterly status reports, loan applications, slides for shareholder's meetings, and formal annual reports.