A Visual Guide To Your Business Financial Statement [INFOGRAPHIC] - Classy Career Girl

A Visual Guide To Your Business Financial Statement [INFOGRAPHIC] When you’re responsible for the economic prospects of your business, the buck quite literally stops with you. Keeping an eye on the daily sales and expenses while vaguely drifting towards growth (or just about away from disaster) will only get you so far. There is a professional document that any serious business leader needs their organization to have and maintain if serious changes â€" from bankruptcy to expansion â€" are to be approached with foresight and insight. This document, of course, is your business financial statement. Quite aside from your company’s books, your business statement is an at-a-glance financial résumé. It doesn’t contain every receipt and item of expenditure, but rather looks at the totals that your business is dealing with on two scales: a balance sheet, which shows the overall financial constitution of your business; and income and cash flow statements, each of which shows your performance over the past quarter from a slightly different perspective. Your balance sheet literally balances the assets of your business â€" the property, equipment, and stock inventory â€" against the liabilities (loan repayments, mortgage etc.) to give an overall level of shareholder equity. This page creates an instant guide to the scale of your business as well as its overall economic health. Your income statement looks at how profitable your company has been over the past quarter (some investors or banks might ask for a different time period), including non-cash considerations such as depreciation. This gives a pretty good idea of the direction your business is going in right now. [RELATED: How To Scale Your Business in the Next Six Months] And the final component is your cash flow statement. Covering the same period as your income statement, this part refers only to the tangible monies that have come in and out â€" giving you an idea of how much money you can actually lay your hands on to pay contractors or debtors up front. Armed with this three-part document, you’ll have a clear, multi-scale picture of just how your business is doing â€" and where it’s going. This intricate guide from The Business Backer can help you figure out just exactly how to create it. A Visual Guide To Your Business Financial Statement [INFOGRAPHIC]