Financial Statements - The Basics

Financial Statements - The Basics

Epoch BG - Explanation of Financial Statements

Below are the basic financial statements that you, as a business owner, should be familiar with.  

If you have dealings with a loan officier, SBA, or an investor, they will all expect you to be able to discuss and understand what is stated on these documents.

Profit / Loss (P&Ls)

The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, (month, quarter, etc). These records provide information about a company's ability or inability to generate profit by increasing revenue, reducing costs, or both.

Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure.

Income Sheet

The income statement shows a company's expense, income, gains, and losses, which can be put into a mathematical equation to arrive at the net profit or loss for that time period. This information helps you make timely decisions to make sure that your business is on a good financial footing.

Cash Flow Statement

A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. ... The main components of the cash flow statement are cash from operating activities, cash from investing activities, and cash from financing activities.

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