How to read a monthly MIS report
A practical guide for owners: what each section of a management report is telling you, and the questions to ask.
By Abhishek Mundada, CA, CFA. Published . 6 min read.
A management information system (MIS) report is a monthly summary of business performance prepared for the people who run the business. Unlike statutory financial statements, it is designed for decisions, so its format should fit the business rather than a regulatory template.
Start with the summary page
A good MIS report opens with the handful of numbers that matter most, typically revenue, gross margin, EBITDA and cash, each compared with budget and the previous period. Read this first and note anything that moved more than you expected.
The profit and loss view
The P&L section breaks performance down line by line. Look at each cost as a percentage of revenue, not just in rupees. A cost that grew in rupees but fell as a percentage may simply reflect higher sales.
Budget versus actual
Variances show where reality departed from the plan. The useful question is not just how large a variance is, but why: volume, price, mix, timing or a one-off item. Timing differences reverse; the others usually do not.
Cash flow and working capital
Profit and cash diverge because of receivables, inventory, payables, capital spending and loan movements. Check whether operating cash flow is broadly in line with EBITDA. A persistent gap needs explaining.
Five questions to ask every month
- What were the three biggest changes versus budget, and why?
- Is gross margin moving, and which products, customers or locations are driving it?
- Is cash moving in line with profit?
- Which costs are rising faster than revenue?
- What decisions or actions follow from this report?
If a report does not lead to at least one decision or action, the format needs work.
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This article is general information and not professional advice for any specific situation. See our disclaimer.