Congratulations on starting your business and becoming a business owner. Most likely you won’t be hiring an accountant right off the bat so you should be familiar with certain reports yourself. These reports allow you to monitor the growth of the company. Luckily there are user friendly programs available that will create these documents for you, should you keep them updated.
This statement summarizes all of the company’s assets, liabilities and shareholder’s equity. This document shows how the company is doing after a specified amount of time. It is a general overview of the company’s finances. Assets are things that the company owns. Liabilities are things that the company owes. This is what lender’s will look at to determine if a company is worth loaning to or not.
This statement is also known as the profit and loss statement (P&L), statement of operations, or statement of income. This document summarizes the total revenue and expenses incurred by the business. It shows the overall profitability over a specific period of time be that a month, quarter or year. Revenues should exceed expenses. Internal stakeholder’s, investors and creditors will look at this statement to determine the level of risk it has as an investment.
Cash Flow Statement
This document shows the cash inflows and outflows for the business. It only takes in to account cash money activity so it does not reflect credit. This statement has three sections; operating, financing and investing activities. This statement shows which section is generating and using the most cash. The document is great to use for budgeting and decision making for future cash use.
Business Essentials: Understand Your Financials and Accounting Workshop
DATE & TIME: May 17, 2019, 11:00am CDT
5524 Bee Cave Road
Westland Office Park
Austin, TX, 78746
This Essentials Series workshop will explain how to read and understand your business financial reports and will guide you in determining what you need from a bookkeeper and/or accountant.