More Related Content Similar to Understanding financial statements (20) Understanding financial statements20. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
The Balance Sheet is a picture in time.
It measures the cumulative result of your business
efforts.
It sustains your business
over the long haul.
22. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
A business can not produce annual Net Income
without a solid Balance Sheet.
A tree can not bear fruit
without the support of a strong trunk.
24. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
The Balance Sheet measures what you own
and what you owe.
What you own is called your Assets.
What you owe is called your Liabilities.
26. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
The equity section is the difference between
the two.
Assets – Liabilities = Equity
Equity approximates
the net value of your
business.
Equity is sometimes called Net Worth.
39. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
How much cash
was consumed
by the Income
Statement?
Income
Statement
Balance
Sheet
How much cash
was consumed
in growing
the Balance Sheet?
41. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
The Cash Flow Statement
connects
the Income Statement
to
the Balance Sheet.
The answer is on the Statement of Cash Flows.
“If I produced
Net Income this
year, where did the
money go?”
49. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
Income
Statement
Balance
Sheet
Statement of
Cash Flows
Success in
business
requires a
focus on all
three
financial
statements.
50. @Evenanerd on Twitterwww.evenanerd.com Copyright © 2013 Geni Whitehouse
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