Shareholder, Dennis Gallant, CPA presented a discussion on understanding business financials to members of the Bainbridge-Decatur Chamber of Commerce in Bainbridge, Georgia. He explained in detail the basic principles that business owners should know, such as reviewing balance sheets and understanding assets, knowing a business’ income statement, determining if the business made a profit or loss, statement of cash flows, and deciding how each dollar will be spent over the course of a company’s fiscal year.
With regards to business functions, business owners must understand how well their business is doing and whether they need to adjust. While they are thinking, investors will consider whether the business they are interested in investing is worth investing or buying. Therefore, always having a company’s financial statements in order are vital.
Owners must also consider year-end planning and other tax considerations such as deducting expenses, purchasing depreciable assets, and timing/reporting collections if accepted on a cash basis.