Operational Audit
Company:
_________________________________
Individual(s) Involved:
Date: ________________
________________________________________________
1. Data Gathering
Please provide copies of the following:
A.
Balance sheets for most current 4 years
B.
Income statements for most current 4 years
C.
Cash flow statements for most current 4 years
D.
Budgets for this year and prior year
2. Overall Assessment
A. Please explain any major changes you have made in the last 3 years.
B. Rate the following in terms of confidence and comfort levels.
(Please circle one number for each item)
Very
Comfortable










Financial Management
Marketing, Promotion & Sales
Planning & Organization
Customer Relations & Service
Human Resources Management
Problem Solving
Long-term Survivability
Purchasing & Inventory Control
Physical Plant/Facilities
Overall Feelings
UTSA – SBDC – EGP
10
10
10
10
10
10
10
10
10
10
9
9
9
9
9
9
9
9
9
9
8
8
8
8
8
8
8
8
8
8
Very
Uncomfortable
7
7
7
7
7
7
7
7
7
7
6
6
6
6
6
6
6
6
6
6
5
5
5
5
5
5
5
5
5
5
4
4
4
4
4
4
4
4
4
4
Page 1 of 14
3
3
3
3
3
3
3
3
3
3
2
2
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
C. Please provide details about your general thoughts and observations about
your firm.
3. Financial Management (Record Keeping)
A. Do you feel that you understand each of your financial statements?
Income statement
Balance Sheet
Cash Flow
yes
no
yes
yes
uncertain
n/a
no
uncertain
no
uncertain
n/a
n/a
B. Do you feel that you receive the statements in a timely manner?
Yes
No
Sometimes
C. Can you track profits from various departments or activities?
Yes
No
D. Have you ever done a 3-5 year trend analysis with your financial statements?
Yes
No
If yes, when?
UTSA – SBDC – EGP
Page 2 of 14
E. Do you ever compare your financial information with industry data?
Yes
No
If yes, how do you compare?
F. Do you do your own taxes?
Yes
No
If no, who?
G. Do you have your books reviewed or audited annually by an independent?
Yes
No
H. Do you ever experience periods of “severe” negative cash flow?
Yes
No
If yes, when was the most recent time?
I. Do your “payables” ever exceed your “receivables”?
Yes
UTSA – SBDC – EGP
No
Page 3 of 14
J. Do you know how to calculate the following business ratios?
i. Current Ratio
Yes
ii. Quick Ratio
Yes
iii. Leverage Ratio
Yes
iv. Gross Margin Ratio
Yes
v. Net Profit Margin Ratio
Yes
vi. Inventory Turnover Ratio
Yes
vii. Return On Investment
Yes
No
No
No
No
No
No
No
K. Do you use any of the above ratios regularly?
Yes
No
If yes, which ones?
4. Marketing, Promotion & Sales
A. Can you describe your customers by age, income, education, business
volume, type of business, life styles, geographic location, etc.?
Yes
No
B. Do you know why your customers do business with you?
Yes
No
Why do you think they do?
C. Do you ever ask customers for suggestions or ways to improve your service
to them?
Yes
UTSA – SBDC – EGP
No
Page 4 of 14
D. Do you ever go to see your customers? (Other than to collect overdue
accounts!)
Yes
No
E. Have you recently added products or services based on customer input?
Yes
No
F. Who are your major competitors?
G. Do your competitors strongly influence your prices?
Yes
No
H. Do you attend trade shows, markets and conventions to stay current and
anticipate customer needs?
Yes
No
I. What benefits do you offer your customers that your competitors can’t
match?
UTSA – SBDC – EGP
Page 5 of 14
J. What types of advertising and promotion do you use?










Newspaper
Radio
TV
Specialty Advertising
Billboards
Coupons
Yellow Pages
Newspaper
Direct Mail
Other
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
No
No
No
No
No
What is the most effective?
How do you know?
K. What is your total annual advertising/promotion budget?
L. Do you have a mailing list of all your customers?
Yes
UTSA – SBDC – EGP
No
Page 6 of 14
M. How do you attempt to attract new customers?
5. Planning Assessment
A. Do you make regular, long-range plans?
Yes
(More than 1 per year)
No
If yes, what type of planning?
UTSA – SBDC – EGP
Page 7 of 14
B. Have you and your key associates ever done an analysis of your strengths,
weaknesses, opportunities and threats? (S.W.O.T. Analysis)
Yes
No
If yes, how long ago?
C. Do day-to-day activities keep you too busy to do all the planning you’d like to do?
Yes
No
D. When you find that change is called for, do you act decisively and creatively?
Yes
No
E. Can someone qualified fill in for you in case of an emergency?
Yes
No
F. Are you grooming someone to succeed you as a manager in the not too distant
future?
Yes
No
G. Does your business have a well defined mission statement?
Yes
No
6. Customer Relations and Services
A. In what ways do you communicate with your customers?
UTSA – SBDC – EGP
Page 8 of 14
How often do you communicate with your customers?
B. How do you let your customers know that you appreciate their business?
How often?
C. What percentage of your total sales do the top 20% of your customers
account for?
D. What special care do you give your best customer?
UTSA – SBDC – EGP
Page 9 of 14
E. What are the best ways to keep your customers satisfied?
F. Do you have more customers now than 3-5 years ago, or fewer?
7. Human Resources Management
A. How frequently do you meet with your key employees to coordinate their
efforts and develop strategies?
B. How much authority do you delegate?
UTSA – SBDC – EGP
Page 10 of 14
C. How do you (1) give employees reasonable freedom to work the way they feel their
jobs can best be done, (2) let them make the day-to-day decisions necessary to
carry out their work and (3) avoid limiting any of them to repetitive & routine tasks?
D. Do you seek your employees’ opinions?
Yes
No
E. Which suggestions from your employees have you adopted in the past 6 months?
F. Is each new person given adequate job training?
Yes
No
G. Are your wage and salary scales:
a. Competitive with local firms?
b. Adjusted to the difficulties and responsibilities
Yes
Yes
How do you determine this?
UTSA – SBDC – EGP
Page 11 of 14
No
No
H. Have you written a personnel manual which governs all matters of employee
policy?
Yes
No
8. Problem Solving
How do you go about solving problems within your organization?
9. Long-term Survivability
A. Are there any trends (other than financial) that can take you out of business
in the next 5 to 10 years?
Yes
No
B. Do present competitors pose any serious problems for you?
Yes
No
C. Have you reached your productivity peak as a company or can you continue
to improve?
Can Improve
Cannot Improve
How can you improve?
UTSA – SBDC – EGP
Page 12 of 14
D. Are there any outside threats to your long-term survivability? i.e.: OSHA,
ADA, EPA, FDA, Environmental, Other Regulations, Worker’s Comp, etc.?
10. Purchasing and Inventory Control
A. Are you aggressively looking for better buying sources?
Yes
No
B. Do you work hard to develop your supplier relationships?
Yes
No
C. Can you track purchases and inventory by departments or other
classifications?
Yes
No
D. Can you determine easily what your fastest turning inventory is?
Yes
No
E. How often are you “out-of-stock” on inventory items?
F. Do you keep a list of what customers are asking for?
Yes
No
G. How often do you take a physical inventory?
UTSA – SBDC – EGP
Page 13 of 14
11. Physical Plant/Facilities
Please describe the physical plant or facilities of your firm.
12. Other Thoughts, Considerations, Feelings
Please provide any additional thoughts, considerations, or feelings you have about
your firm.
UTSA – SBDC – EGP
Page 14 of 14