The Statement of Changes in Equity records what happens to any profits for the year; whether they are paid out as dividends or kept in the business as retained earnings. Generally speaking, the higher the equity, the better for the company. However, shareholder loans can...
Your Statement of Profit & Loss, or Income Statement, tracks the overall performance of your business. It begins with the Gross Profit from your Trading Account then lists all overhead expenses, giving you the Net Profit. Some software combines the Trading Account and the Profit...
Your Balance Sheet, or Statement of Financial Position, measures the net worth of your business at a point in time and shows if your business is solvent (if assets are greater than liabilities). It details assets, liabilities, and shareholders' equity (funds contributed by shareholders and accumulated...
In the first part of this guide we looked at why knowing your numbers is important and how the better you understand your financial reports, the better your decision making and results will be. Your key financial reports The rest of this guide over the next few...
Your financial reports tell you the story of your business; allowing you to interpret the results of your business activity. The better you understand your financial reports, the better your decision-making and results will be. We want to share the benefits of understanding your numbers, give...