Small business financial statements provide a snapshot of your company’s financial position. Income statement, balance sheet and cash flow statements are three very important financial statements prepared on a monthly and quarterly basis. These financial statements are also prepared on an annual basis for many different purposes, one of them being for audits. The financial statements of a company can be compiled using similar information as that of when preparing your small business tax returns. Our professionals at SRJ Chartered Accountants Professional Corporation will help you create financial statements so that you can get a more accurate picture of your company’s overall financial health to make better decisions.
The company’s income statement is also known as the “profit and loss statement” or “statement of revenue and expense.” Income statements measures a company’s financial performance over a specific accounting period. Typically income statements are prepared over a fiscal quarter or year. It summarizes the company’s revenues and expenses from both operating and non-operating activities, and provides a statement of net profit or loss. It also can provide additional information such as gross profit, fixed versus variable expenses and what revenue streams may be most profitable. Income Statement is an essential component to small business financial statements.
Cash flow Statement
The cash flow statement provides aggregate data regarding all cash inflows a company receives from both its ongoing operations and external investment sources, as well as cash outflows that pay for business activities and investments during a given accounting period. It is very important to note that the cash flow statement differs from the income statement because it only tracks the company’s cash inflows and outflows, whereas the income statement might track non cash items like amortization and impairments, which are important when evaluating a small business financial statements.
Cash can enter a business in many ways, which is why it is important to look at the cash flow statement in the context of the company’s other two financial statements. SRJ Chartered Accountants can work with you to make better sense of your cash flow so you can keep your finger on the pulse of your company’s operations.
Balance Sheet Statement
A financial statement that summarizes a company’s assets, liabilities and shareholder’s equity at a specific point in time. Assets such as cash, inventory or property on the company’s balance sheet tells investors and other stakeholders of the company what the company owns, whereas the liabilities such as account payable or long-term debts on the company’s balance sheet shows what the company owes. The shareholder’s equity section of the balance sheet shows how much money shareholders have invested in to the company. The balance sheet must follow the follow the following formula:
Asset = Liabilities + Shareholder’s Equity
Preparing these financial statements can be daunting, accountants at SRJ Chartered Accountant have the technical competency and expertise combined with years of experience in helping clients put together financial statements. The company’s financial statement can then be used to attract more new investors, obtain a loan, and find other innovative ways to grow your small business.
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