Do you know how much debt your business has? Do you know the value of the assets the business has? Contractors who can’t give at least a rough estimate for both those numbers need to get better acquainted with their balance sheet.
Over the last couple of months in this space, I’ve talked about the importance the cash flow statement and the income statement. Both measure critical and different aspects of your business, and both give insights into the health of your company. This month, I’ll go over the basics of the third financial statement business owners need to know about: the balance sheet. This overview will explain what a balance sheet is and why it’s important. Of course, you’ll want to meet with an accountant to get a full, professional explanation of all of these statements, and what they show about the health of your business.