Understanding Financial Statements: A Guide for SMEs
As a business owner, it’s crucial to understand your financial statements. These documents provide insights into the financial health of your business and are essential for making informed decisions. Here’s a quick guide to the key components:
1. Income Statement
o Revenue: The total income generated from sales.
o Expenses: Costs incurred in the process of earning revenue.
o Net Income: The profit or loss after all expenses are deducted from revenue.
2. Balance Sheet
o Assets: What your business owns (e.g., cash, inventory, property).
o Liabilities: What your business owes (e.g., loans, accounts payable).
o Equity: The owner’s interest in the business.
3. Cash Flow Statement
o Operating Activities: Cash generated from core business operations.
o Investing Activities: Cash used in or generated from investment activities.
o Financing Activities: Cash flows related to borrowing and repaying loans or equity.
Understanding these statements helps you:
• Assess your financial performance
• Make strategic business decisions
• Plan for growth
• Ensure compliance with financial regulations
Need help with your financial statements? Corporate BackOffice Pte Ltd is here to support your accounting needs. Let’s work together to drive your business forward!
If you need help, feel free to contact us at :
(M) +65 90880669
