This course explores how to keep track of three most important measures of your business performance. We focus on how to understand and develop three types of financial reporting (shown below) to maintain a viable business and to act as the basis for planning growth and investment and for inclusion in end of year reports and business plans.
- Cash flow: Ensuring there is sufficient movement of short term assets (cashflow) to meet short term liabilities (the bills) to keep your business afloat. This is one of the leading causes for a business to fail. This is where analysts see how much the company spent on stock repurchases, dividends, and capital expenditures. It also provides the source and uses of cash flow from operations, investing, and financing.
- Balance Sheet: This is a snapshot of a businesses financial position that provides an overview of how well the company manages its assets and liabilities. Analysts can find information about long-term vs. short-term debt on the balance sheet. They can also find information about what kind of assets the company owns and what percentage of assets are financed with liabilities vs. stockholders' equity.
- Income Statement: The income statement provides a summary of operations for the entire year. The income statement starts with sales or revenues and ends with net income. Also referred to as the profit and loss statement, the income statement provides the gross profit margin, the cost of goods sold, operating profit margin, and net profit margin. It also provides an overview of the number of shares outstanding, as well as a comparison against performance the prior year.