RMA: The Banker’s Secret Book You Must Know

Yes, Virginia, bankers do have a secret book.  Yes, it has answers you need to build your business, get a loan and more.  But wait, it gets even better.  Let me back up just a little.

If you are writing a business plan, trying to project your company’s financial future, or simply wondering why you aren’t making as much money as you want, you ought to be looking at your financial statements.  Finding the good and bad in a company’s financial statement isn’t that simple, but it isn’t hard either.

That’s where the secret book comes in.

This secret book shows you exactly what your income statement should look like.  Then, you can look at your business performance — from top line sales to cost of goods, salaries and even net profit — and see where you are strong and where you are weak compared to your competitors.

Are you spending too much on your raw materials?  Are you paying your employees too generously?

The book has the answers.

Some people know this book by its old name — Robert Morris Associates (or RMA) Annual Statement Studies.  Other’s know the new name “Risk Management Association (or RMA)  Annual Statement Studies“.  Anyway, you can just call it the RMA book.

If you’re not ready to rush out and spend $600 on this book from the RMA, trot over to your local bank.  Ask to speak to a loan officer.  Ask the loan officer to make a copy of the RMA pages for your industry.  The book is several thousand pages long… but all you need is on about 3 pages.

Want to see a free sample?  If you are in the business of growing wheat, this is what your RMA page of financial ratios would look like.

Now I’m not saying that this is simple stuff.  But it is important.  And any banker can explain it to you.  While you are in the loan officer’s desk, ask him to go through the first page with you.  For more detailed instructions, you can read this thorough instructions on interpreting financial statements and ratios.

FREE OFFER:  I’ll do you one better.  If you go to your banker and get the pages, email or fax me a copy and I will help you understand them.  If you send me a copy of your current financial statements, even better.  We can walk through them together and I’ll show you exactly where your business is ahead of — or behind — your competitors.

Dedicated to your (better-than-industry-average) profits,


Originally Published

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