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Financial Report 101 for Business Owners: Your Balance Sheet

Guest post by: sam levitz

Article Overview: As a financial report, the balance sheet is among the most important things that can help investors decide to invest in your business. For this reason, it is important that you have a strong statement.

Financial Report 101 for Business Owners: Your Balance Sheet

As a financial report, the balance sheet is among the most important things that can help investors decide to invest in your business. For this reason, it is important that you have a strong statement. This is because it will be used to back up any financial information that you provide as part of your business' success. This financial statement depicts how much money you own, owe and your business has. But as opposed to the other types of statements, the balance sheet is the only one that can be given at any given time. In order to come up with an equation for this, the sum of your liabilities and owner's equity should be equal to your business' assets.

Assets

To make things simpler, this part of the financial report contains information on the things you own. This will help justify your earnings and where you put your money. This list can contain things you own such as land, vehicles, buildings, inventory, cash, and several other things. Even the stapler and pen that you own is your asset. It simply covers everything that your business has been able to acquire through purchase or by contributions.

Liabilities

Your liabilities are made up of the things where your money goes to. This includes your rent, operating expenses, and other expenditures. Through this list, you are able to illustrate where your money goes to. While there are some short-term expenses, there are also long-term loans that can be part of this list.

Owner's Equity

In a nutshell, this part of the balance sheet is used to summarize how much money is left after the expenses have been paid. It also entails if your business is making money. If your business is made up of a partnership, the owner's equity also clarifies how much each owner gets.

This financial report needs to be strong in order to supply the right information to your interested investors. There are some business owners who fake this information. By being a responsible business owner, it is your role to show the truth about your company. Otherwise, you might get in trouble with the authorities.

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Article Tags: assets, balance sheet, business owner, financial report, liabilities, owners equity
Referred by: http://jaykubassek.com



Related Forum Posts
Re: Sources of Cash - Thanks for the help. The items will be recorded in the Balance Sheet. But why does the Balance Sheet always balances. Is there a specific reason
Re: Sources of Cash - Thank you for guidance and direction. Is there a simpler way of understanding the Balance Sheet and all the components that are to be recorded.
Exclusive: Interview with Results - Hi Forum Members, I'm helping start up a Business Coaching and Consulting company here in Toronto, Ontario, Canada (a Subsidiary of RSC Business in Los Angeles). As a Research and Development Intern I am required to practice my listening and interview skills by surveying Small and Medium Businesses on thier Business. This Survey is designed by RSC Business to also assist the Business being interviewed more insight into their own business. I am looking to interview about 30 businesses across North America over the span of 3 months. At the end of these interviews I will be publishing a report of the results and they will be made available for free to the Interviewees. The Report data will include responses from a minimum of 100 interviews. I would like to extend this opportunity to members of the Forum. If you would like to have this short 20-30 minute interview conducted on your Business and you reside in North America please send me an email or PM. Please contact me at andy[at]jvprosperity[dot]com to arrange our interview and to get free access to the results when they are published.
A ton of Great Women - You might want to profile Teresa Cascioli of LakePort Brewery. She has an amazing story! I met her at at the celebratory luncheon for the Profit/Chatelaine Top 100 Women Business Owners. The Top 100 list is also a great resource for inspirational stories of Women Entrepreneurs.
Private Equity Needed - I am entertaining the idea of going back to private equity for my Business due to the lack of interest and stability from the Financial Institutions. I had private equity in the past for my business and I believe it works best for me and my company. Should anyone have an interest or would like to point me in the right direction, I would love to hear from you. Sincerely, Kyle Lowe President H&L Motorcars


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