There are three key components of the finances of a business—income statement, balance sheet and cash flow—that are essential to understand to contribute to discussion about the organization’s performance, said Quendrida Whitmore, senior consultant with Leading NOW, the educational content partner for Convenience-Store Women’s (CSW) event. Financial acumen is therefore a critical aspect of the business for all convenience-store team members, not just team leaders, to learn, she said.
By measuring the key activities of a company, members of a company can manage and improve profit. It’s assumed that the majority—in the c-store industry, white men—already understand these business outcomes but underrepresented talent does not, Whitmore said.
“Whether it’s true or not, the perception is really important,” she said. “How we speak about financial outcomes, how we understand the numbers, how we tie it together and how we tell the story—that’s what’s important.”
Whitmore shared these insights at CSP’s second-annual CSW, held in November in Charleston, South Carolina.
Income Statement
An income statement reports how much money a company made and spent over a period of time. It includes revenues and expenses, profits and losses and earnings per share.
The parts of an income statement that a company can control include increasing the number of new customers, customer satisfaction, number of repeat customers, average transaction size and frequency of transactions per customer. Companies can also maximize marketing and product pricing.
For example, convenience retailers can control the sales of food, beverage, fuel, promotional materials, non-traditional sales and franchise revenues.
Balance Sheet/Expenses
Balance sheets report what a company owns and what it owes at a fixed point in time, or its costs. It accounts for assets, liabilities and shareholder equity.
Convenience retailers can influence inventory, leverage accounting tools, reduce waste, optimize employee scheduling, cross-train employees, utilize technology and more.
Cash Flow/Customer
Finally, cash flow reports the exchange of money between a company and the outside world, such as customers and businesses, over a period of time. It shows increases and decreases in cash as well as operating, investing and financing activities.
To maximize cash flow, convenience retailers can monitor customer satisfaction, understand what drives customer experience, respond to customer concerns, engage the community, monitor social media and create a safe environment.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.