How Useful Are Financial Statements?
By leLabu on Sep 24, 2006 in E-Biz
A financial statement will tell you and others the state of your business. The three financial statements you would most likely prepare at the start would be a balance sheet, an income or profit and loss statement, and a cash flow statement.
A balance sheet is a formal document that follows a standard accounting format showing the same categories of assets and liabilities regardless of the size or nature of the business. It provides an overview of a business’ health at a point in time. It is a summary of what the business owns (assets) and owes (liabilities) and is generally prepared at the close of an accounting period such as month-end, quarter-end, or year-end.
As a new entrepreneur, you should view your Balance Sheet as an important decision making tool. It would help therefore, to prepare it on a regular basis rather than at the end of your financial year.
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