When investing in commercial real estate, you want to have your finger on the pulse of the financial performance of your portfolio. Most investors have both internal and external parties interested in property financial performance. To meet the needs of internal parties such as managers, and owners, and external parties such as stakeholders and equity groups, investors frequently run a financial statement analysis.
The financial statement analysis in the U.S. is based on generally accepted accounting principles or GAAP. According to GAAP, a company must create and maintain three primary financial statements:
The rules fluctuate between public and private companies, where public companies have stricter standards for financial statement reporting and require accrual accounting. Private companies have more flexibility in their financial statement preparation and can use either accrual or cash accounting. Because the statements intertwine, they all affect one another. An error can cause problems across the company.
The financial statement analysis process analyzed the statement in three ways, horizontal, vertical, and ratio.
Through the financial statement, the analysis process determines the overall financial performance of the portfolio or property for internal and external interests.
Financial statement analysis is done for decision-making purposes. External stakeholders use it to understand financial performance, the overall health of an organization, and business value. Internal parties use it as a monitoring tool for managing finances.
By maintaining the financial statements, owners and investors can drive down costs of loan servicing, easily stay current on financial strengths and weaknesses in your portfolio and properties.
Clik.ai has been helping Commercial Real Estate investors, brokers, lenders, and managers navigate financial statement analysis since 2017 and have helped identify $12 Billion in commercial real estate opportunities.
By working with the Mortgage Services, Commercial Real Estate investors and lenders can reduce operating expenses, stay competitive, free up time to focus on lending relationships, and spend time on deal analysis rather than paperwork for financial statement analysis.
The Mortgage Services has a team of on-demand team of commercial real estate analysts who are experts in financial statement analysis, commercial loan underwriting, lease abstractions, lease audits, automated underwriting, and much more. Through the Mortgage Services commercial real estate investors, lenders and brokers can lower the cost of analysis and loan servicing.