balance-sheet(3/0)
Only assets generate value
The structure of accounting around the world rests upon five fundamental categories: assets, liabilities, equity, income, and expense. Every possible financial iteration may be represented by a transfer from one of these categories to another. Take out a $10,000 loan? Your assets increase by $10,000, and your liability to the bank increases by the same amount. Pay $1,000 off the loan? Your liabilities decrease to $9,000 and your equity grows by the same amount.…
Use the balance sheet to monitor health
The balance sheet shows a business' financial state at a point in time, while the income statement shows the operation of your business over a period of time. The two financial documents most widely used are the balance sheet and the income statement. The balance sheet lists the assets, liabilities, and equity of an entity at whatever snapshot in time it’s written for. The income statement shows how the assets were used over a defined period.…
Use the income statement to refine value creation
The balance sheet shows a business' financial state at a point in time, while the income statement shows the operation of your business over a period of time. The two financial documents most widely used are the balance sheet and the income statement. The balance sheet lists the assets, liabilities, and equity of an entity at whatever snapshot in time it’s written for. The income statement shows how the assets were used over a defined period.…