The Different Types of Financial Statements
Financial literacy is imperative when it comes to running a small business.
It’s not one of those areas you can afford to neglect. The future of your company could be at risk without the proper documentation. That’s why Affinity Bank has gathered some pertinent information to keep in mind. Let’s start by looking at the different types of financial statements.
First, you have your balance sheet. This allows for evaluation of your company’s execution at any given instance. Then, there’s your income statement. Last but not least, we’ll review your statement of cash flow.
Balance sheets are perfect for comparing what’s going in versus what’s coming out. The resulting figure is an accurate depiction of your company’s overall worth. In short, you should know your true value, and be able to access it at a moment’s notice.
Your income statement is another great opportunity to compare and contrast important figures. This time, it includes all transactions, against any existing debits. Managing these properly is a great way to keep things in the black. Or, if you’re in the red, it’s an opportunity to assess the cause and fashion a solution.
Statement of Cash Flow
You’ll always want to have a good idea of the state of your liquid assets. That includes knowing how much cash you can operate with from moment to moment. Also factored in here are typical daily costs, the total value of your current assets, and debts.
These financial statements work together. They give you a solid portrayal of your business’s financial standing. It’s a good idea to constantly review and update these documents. Doing so ensures you’re always clear on how the company is performing. Also, it lets you know if there are any areas of improvement to address.
First Steps Into Your Company’s Future
The different types of financial statements are vital to your business’s sustained success. But, they are only a piece of the puzzle. There’s so many other key items to keep track of, from other banking tools, to emergency savings, and more.
Don’t let the stress of managing all this stunt your growth. That’s where Affinity Bank comes in. We don’t just want your business; we have a vested interest in your success. Which is why we offer such extensive supports and resources. We aim at your small business’s successful journey. Contact us today to learn more.