PGA Level 1 Facility Management Practice Exam

Financial statements analysis is a fundamental method used by managers to enhance their understanding of financial performance. This process involves examining the various statements, including the income statement, balance sheet, and cash flow statement, to gain insights into the organization's financial health and operational efficiency. By analyzing trends in revenue, expenses, assets, and liabilities, managers can assess profitability, liquidity, and overall financial stability, which are critical for making informed business decisions.

Additionally, financial statements analysis allows managers to benchmark performance against industry standards and historical data, facilitating a deeper understanding of areas that may require improvement or adjustment. This analytical approach empowers managers to identify issues, optimize resources, and strategize for future growth, thereby directly impacting the facility's and overall organization's success.

Other methods, while useful in various aspects, do not focus specifically on the financial performance to the same extent. For instance, direct observation provides qualitative insights into operations but lacks financial metrics. Point-of-sale systems are great for tracking sales data but do not offer a comprehensive financial overview. Market research primarily focuses on customer preferences and market trends rather than internal financial analysis.