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Need to Increase Your Balance Sheet Understanding?
In these turbulent times many small business owners need to increase their balance sheet understanding, instead of just focusing on the income statement.
The balance sheet provides a great deal of information as to the
overall health of the business. A business can have a great
looking income statement but underlying issues can be identified by proper balance sheet analysis. The sort of weak spots the balance sheet identifies are collection problems, debt payment ability, efficient use of capital and overall liquidity of the company, to name a few. On the Reading a Balance Sheet page (link below) I will explain common ratios that will help determine if the company running as well as it should.
To gain a solid understanding of the balance sheet I'd suggest following the page links below in order, they start with an deeper explanation of the statement, show transactions and their effects using a sample balance sheet, and finally how to read a balance sheet.
What is a Balance Sheet ? - Learn all about the Balance Sheet basics
Make a Balance Sheet - Follow transactions through and see how they effect the balance sheet
Read Balance Sheet -
Examples of Balance Sheets -
Click here to leave the Balance Sheet Understanding page and return to the home page, where more important tax and accounting
information can be found.
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