As a small business owner, there are some things that are simply part of owning and running a successful business. Financial statements are one of those things. There are a few financial statements that are necessary for the success of small businesses. Mark Dicus & Company is here to talk about them in detail so that you understand what these financial statements include.
What are Financial Statements?
It’s important to have a good understanding of what financial statements are a small business owner. They are documents that show in detail a company’s financial performance throughout the quarters that make up the calendar year. A healthy financial statement will include three different documents, income, balance statement, and cash flow statement.
Income Statement
he income statement is often referred to as the profit and loss statement. It helps business owners track their profitability. It will be a document that shows both the profits that are made, also known as revenue. It will also clearly show all the total expenses it took to make that revenue. This can help companies make informed decisions about how to allocate resources.
Balance Sheet
A balance sheet statement will give a small business a clear picture of their financial position at any given time. There are several things that are included in a balance sheet. Things like liabilities, assets, and equity will be included in this document. This can allow a company to see clearly their financial health and the sustainability of their company. It can be the key to keeping your company from becoming insolvent.
Cash Flow Statement
Easily the most important statement for small business owners is the cash flow statement. This is a document that provides critical information about your company’s ability to manage and generate cash flow. There are several financial obligations for small businesses and the cash flow statement gives you the picture you need to ensure you have enough cash to cover those obligations. You will be able to see the inflow and the outflow of cash within a specific timeframe and will be divided into three different sections: operating activities, investing activities, and financing activities.
Using Financial Statements to Make Smart Decisions
Understanding your company’s financial performance is one of the biggest keys to making wise decisions for the company. Comparing your financial statements over time can help you identify trends patterns in the way that your company operates. This is the best way to improve your company’s financial performance.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
Since financial statements are so essential to your company’s success, it’s important that you get them right. At Mark Dicus & Company, we will prepare your financial statements for you so that you know they have all the information needed to make wise choices for your company. Let us handle your accounting needs, as it is our goal to help your business achieve all the financial goals that you have in place. Call us today!