Decoding Financial Statements: What Every Business Owner Should Know.

Financial statements are the blueprint of your business’s financial health. 📊 Understanding them can help you make better decisions, secure investments, and plan for growth. Here’s a quick breakdown:

✔ Balance Sheet – A snapshot of your business’s financial position at a specific point in time. It shows your assets (what you own), liabilities (what you owe), and equity (the owner’s stake in the business). This helps you track your company’s financial stability and liquidity.

✔ Income Statement – Also known as a Profit & Loss (P&L) statement, this shows your revenue, expenses, and profit over a set period. It helps you understand whether your business is making money or running at a loss and where to cut costs or invest more.

✔ Cash Flow Statement – This tracks the movement of cash in and out of your business. Unlike the income statement, it focuses on actual cash transactions, helping you ensure your business has enough cash on hand to cover expenses and grow sustainably.

Why does this matter? Having a clear understanding of these statements helps you make informed financial decisions, avoid cash flow problems, and keep your business financially healthy. Need expert financial guidance? The Glass Castle has got you covered! ✅

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