“You can’t manage what you can’t measure.”
—William Hewlett, co-founder of Hewlett-Packard Company
Hewlett suggests that in order to effectively manage something, you need to be able to measure and monitor your progression or regression.
Solid accounting practices and financial statements provide the means to measure the profitability of your business. However, all of the accrual accounting practices and fancy financial ratios are meaningless if you don’t know how to use the information to change performance.