What's the shortest route to higher profit at your company? Should you increase sales, reduce costs, raise prices or find some magic combination of all three?

Mobley Matrix, published by Mobley Matrix International Inc. of Los Angeles for $895, will show you on your computer screen the way you need to move. Based on principles developed by the late Louis R. Mobley, first director of International Business Machines's in-house Executive School, the matrix rearranges traditional financial statements so that their data can more easily be used to project future performance.

Like Mobley, an engineer and not an accountant, I've long had trouble understanding just how all those numbers on corporate balance sheets and income statements are derived. As explained in an introductory chapter of "Guide to Finance," the handbook that accompanies the software, a fundamental misconception of many people is that an income statement provides information about a company's cash flow.

What Mobley did to make financial statements clear to non-financial executives was to separate out the cash transactions that formed the link between the income statement and the balance sheet. Then he reorganized the order of the resulting cash and income statements to correspond with the same asset and liability categories given on the balance sheet. That simple rejiggering of the figures makes it easier to track a company's performance from one periodic balance sheet to the next.

A matrix, of course, is simply a table of numbers in which each entry vertically in a column is related and each entry horizontally in a row is related. The Mobley Matrix just fits onto a computer screen. There are five vertical columns -- Beginning Balance, Adjustments, Income Statement, Cash Statement and Ending Balance. Horizontally, there are 17 rows of asset and liability categories.

The matrix is tied together mathematically so that you can easily see what kinds of changes during the period being examined resulted in the differences between beginning and closing balances, category by category.

If that's all there was to it, you could program the formulas into spreadsheet software to replicate the basic matrix. One enhancement is the ability to subdivide any number on the matrix into up to 10 detail components. Much more important is the planning strategies screen that turns the Mobley Matrix into a powerful "what if" planning tool. This is where you test the effects of various strategies on the bottom line.

You have 51 variables to work with in 11 categories such as sales, turnover periods, inventory, credit ratios, expense-to-sale and expense-to-growth ratios, cash flows, cash-on-investments (the ratio of operating cash flow to average total assets) and other cash strategies.

To test changes in strategies, define the period involved, type in the appropriate details on the planning screen and instruct the program to calculate the effects. You'll see the resulting numbers in the matrix.

But a better way to see the impact is graphically and Mobley Matrix can produce a number of charts. Beyond the basic varieties of line and bar charts, there are six unique graphs. Sustainable sales shows if you'll generate more cash or need to borrow as sales increase. The break-even sales graph shows the point of zero net income when all other variables are kept constant.

There are three non-linear charts depicting return on investment, return on equity and return on employed assets. For each, you can see if performance from period to period has been good or bad. Improvement is depicted by movement toward the upper right corner of the chart. Any trend that goes down or toward the left is probably not good.

You can easily see differences in management policies on these charts. For instance, on the return on investment chart it quickly becomes obvious whether stressing cost control or more aggressive marketing is the favored strategy. The fourth non-linear chart depicts cash on investment and shows positive and negative results as mirror images of one another.

Of course, just because a graph shows which way a company's financials should move to yield the best results for any one measure of performance doesn't mean that is what would be best overall. But for business executives with IBM or compatible computers, the Mobley Matrix would seem to provide a useful new way to look at the numbers.

Richard O'Reilly designs microcomputer applications for the Los Angeles Times. Readers' comments are welcomed, but the author cannot respond individually to letters. Write to Richard O'Reilly, Los Angeles Times, Times Mirror Square, Los Angeles, Calif. 90053.