Now that you know some of the key terms, you need to put them to use!
There are three basic documents that will help you answer critical questions about your business.
Equity is the value of your business assets minus the liabilities; it’s basically the value you’d place on your company if you had to put a price tag on it today.
Profit and Loss Statement: Is your business profitable?
Your profit and loss statement is a summary of your revenue minus expenses for a period of time, usually a quarter of the year at a time.
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It shows your profits or losses at a glance for that chunk of time.
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Cash Flow Statement: Where is your business’s cash going?
This statement categorizes cash flow into three types of activities: Don’t know how to get started creating these documents?