Tips about Small Business Financial Statements
Your financial statements are a window into your business. Failure to understand and review them frequently can lead to some massive headaches (take it from our own experiences!).
Join us as we take a look into what goes into your Small Business Financial Records.
In this newsletter you’ll learn about:
- Your Annual Report
- Your 10-K
- Your Balance Sheet
- Your Income Statement
The Annual Report
Your annual report is a document of your business to be shared with your stakeholders. Think of it as a chance to tell your story in a unique voice, and show potential stakeholders you are committed to them.
Your annual report should include:
- Important Company Information
- Yearly Business Activities
- Sales & Expenses
- Profits & Losses
- Business Trends
- A Letter From The Founder To Shareholders
- Plans For The Next Year
The 10-K is a collection of financial statements that have to be filied with the SEC every year. The importance of this is to break down where debt lies within your company i.e deferred taxes, short-term loans, overhead, etc. Included within this is The Income Statement and Balance Sheet.
The Income Statement
Your income statement, also known as your P&Ls shows your Profits and Losses for that year.
Formulas Commonly Used:
- Gross Profit Margin: It tells you how much profit is left after subtracting the cost of the goods or services sold. GPM = Gross Profit / Revenue
- Net profit margin is the ratio of net income (or after-tax profits) to revenue. NPM = Net Profit/ Revenue
Learn More About The Income Statement Here: https://www.thebalance.com/formulas-calculations-and-ratios-for-the-income-statement-357575
The Balance Sheet
The balance sheet shows assets, liabilities, and net worth or book value. Packed with data, the balance sheet can be intimidating, but it is one of the best ways to assess the health of your company.
Learn More In Episode 138:
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SHANNON JEAN https://www.linkedin.com/in/shannonjjean
DAVE HAMILTON https://www.linkedin.com/in/davehamilton/
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