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Business Finance Basics

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There are three basic reports important to your business.

  • Income or Profit and Loss Statement
  • Cash Flow Statement
  • Balance Sheet

An income or Profit and Loss Statement shows where and how money goes in and out of a company for a period of time.  Monthly, quarterly and annual Profit and Loss Statements show the financial strength of a company.

The Cash Flow Statement is one of the most useful financial management tools because it shows you exactly how cash is flowing in and out of a business. 

The Cash Flow Statement is a guide for business making business decisions such as adding employees or planning major purchases.

A Balance Sheet is a financial snapshot of your company highlighting all major assets and liabilities.