When you are owning and running a franchise, it is important to know where you stand financially. This is especially true if you are thinking about selling your franchise any time soon. Sometimes you can think you are doing well, but when you go to sell the franchise, you find that you weren’t in as good a position as you thought you were. Mark Dicus & Company is here to talk about how you can figure out where your franchise really sits financially.
What Can an Income Statement Tell You
An income statement is helpful in seeing what you are bringing in as well as what you are spending. This gives you a clear picture of what money is coming in and what money is going on a monthly and even quarterly basis. If you need to know where your bottom line is as a company, your income statement will do just that. You can take a good look at your inventory and see what certain costs are doing for your franchise with this statement as well. It is important to note that your income statement isn’t going to give you a clear picture of what your franchise is actually worth though. It will simply show you what your bottom line is and that’s about it.
How Your Balance Sheet Shows You the Bigger Picture
If you want a clear picture of the overall value of your franchise, you need to rely on the balance sheet to give you that information. This is the document that will show the total worth of any company. A balance sheet brings together three different things to give you this information: assets, what the company owes and what’s left after liabilities. Your income statement will show you the finances of a company during a certain time period, while the balance sheet covers much more. These two documents should be looked at together though. Together, they can show you any possible problems like your liabilities being far larger than your assets. That can seem like a financial weakness to someone that is considering buying your franchise.
Importance of Accurate Record Keeping
If you are interested in selling your franchise, you better make sure your books are in order. Your financials should not only be current, but they need to be extremely accurate as well. To potential buyers, your franchise will not look nearly as appealing if you don’t have your books in order.
Bookkeeping, Accountant Services & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you struggle with keeping your books organized, you can rely on the financial professionals at Mark Dicus & Company to help you keep your books organized so that you are ready in the case that the opportunity comes up to sell. Keeping accurate financial records and books can be a challenge when you aren’t confident in your bookkeeping skills. You won’t regret leaving this task up to us. Call us today!