Financial

From time to time, I come across small business owners that do not understand their financial statements. Moreover, they use the wrong words to describe the fundamental economic situation in the business. Let me clarify a few basic terms related to your financial statements. Sales and Revenue are synonymous and mean the ‘top line’ of the income statement …

Financial statements language Read More »

Companies adjust net income (net profit) in numerous ways to determine net cash provided by operating activities under the method called INDIRECT. A helpful starting point is understanding why net income must be converted to ‘net cash provided by operating activities’. Under Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) most companies use the accrual basis …

Cash provided by operations Read More »