2022 End of the quarter is near…Do you know how to read your reports to adjust your business?

Quarterly financial reports are important tools that allow business owners to understand the financial health of their companies. From these reports, business owners can identify areas that need improvement and make the necessary changes and ensure they are on track for success at the end of the quarter.

 

What is a Quarterly Financial Statement?

The quarterly report includes specific financial reports that show a company's financial health and growth. Specifically, a quarterly report will include the company's income statement, balance sheet, and cash flow statement.

Reading and understanding these reports can be confusing and difficult for business owners who are not financially savvy. However, it is important to learn what the reports mean and how they can improve your business. Read about them below:

  1. Income Statement

This document indicates how much money a company has made and spent over a specific period. It can be divided up into three categories: revenue, expenses, and profits. With it, management can get a sense of how well their company is doing.

The main sections of an income statement are revenue, expenses, and net income.

  • Revenue is the total amount of money that a company has earned during a specific period. This can come from selling products or services, investing, or borrowing money.
  • Expenses are the costs of doing business, including things like salaries, rent, and supplies.
  • Net income is the difference between revenue and expenses. This number shows how much money a company has earned after taking into account all of its costs
  1. A Balanced Sheet

This is a financial statement that shows the company's liabilities, assets, and owner's equity over a period. This statement helps management teams to understand how much money they have available to reinvest in the company and how much they owe to creditors.

  1. A Cash Flow Statement

This is used to track cash movement in and out of a company. This information can help understand how a company is performing financially and where to make changes.

Final Take Away
These financial statements can be immensely helpful in understanding the financial health of a company. By taking a close look at these reports, companies can identify areas that need improvement and make the necessary changes. This is especially important when companies want to ensure that they are on track for a successful future at the end of the quarter.