More Ways Accounting Helps Your Business – Sticking to a Budget Although it’s not included among the standard financial statements, one of the most useful reports you can prepare for your own use is a budget. A budget gives you something to measure your actual results against, so you can see right away in a … Read more
More Ways Accounting Helps Your Business – Developing Pro Forma Statements The financial statements you learned about in earlier chapters provide historical information. To keep your business on track, though, you must consider the future. Future-oriented financial statements are called pro formas, and they are based solely on your expectations of what is likely to … Read more
More Ways Accounting Helps Your Business – The Break-Even Analysis The break-even analysis provides you with a crucial piece of data: your company’s break-even point. The break-even point occurs when your company’s revenues exactly equal its costs and expenses, resulting in neither a profit nor loss. When sales fall below the break-even point, your business … Read more
More Ways Accounting Helps Your Business – Know Your Costs to Set Your Prices It seems like a simple fact: to earn profits, your prices have to be higher than your costs. It stands to reason that if you just add some percentage to your costs, your company will profit. With product-based businesses, set- ting … Read more
The Best Use of Your Financial Statements – When You Need Outside Funding Sometimes your company will need a cash infusion from the outside to keep things going. When that happens, you have two options for bringing in money: equity or debt. The financial statement analysis can shine a light on which option makes more … Read more
The Best Use of Your Financial Statements – Boosting Profitability and Positive Cash Flow For most small companies, the important points to come out of financial statement analysis are ways to boost profits and improve cash flow. Since the two usually go hand in hand, a positive change in one can bring the same in … Read more
The Best Use of Your Financial Statements – A Basis for Decision-Making Whether your company is struggling to get by or ready to expand, you’ll need to make some decisions about what to do next. The best place to gather what you need to inform your decisions is your financial statements. As you analyze your … Read more
The Best Use of Your Financial Statements – Nipping Problems in the Bud New businesses are usually fraught with financial problems: margins too low, debt too high, not enough cash, not enough profits. That’s normal and to be expected. How you deal with these initial setbacks, though, can mean the difference between success and failure … Read more
The Best Use of Your Financial Statements – Calculating Crucial Financial Ratios The idea of calculating financial ratios can seem intimidating, but it’s really much easier than it sounds. A ratio is really just a fraction, expressed in a slightly different way to let you see how two numbers compare to one another. You actually … Read more
The Best Use of Your Financial Statements – What Can Your Statements Tell You? At face value, your financial statements tell you a lot about your company’s performance. The statement of profit and loss lets you know how much the company sold, and whether those sales resulted in overall profitability. The balance sheet tells you … Read more
