By Brian Ravencraft
Every agribusiness owner and farmer needs to understand the importance of maintaining and reviewing financial statements.
Think of these statements as a map of where the money for your business is coming from and where it is going. These statements are true records of your financial activity. These are the documents that let you understand the financial health of your business and allow you to make smart financial moves in the future.
These are the three types of financial statements:
- Income Statement: This statement displays your company’s new income growth or loss. The statement covers a certain period of time. You may hear your accountant refer to this as your profit and loss statement. Or “P&L” for short.
- Balance Sheet: This document looks at your business’s net worth at a given point in time. This is the document you turn to when you want to get a feel for where you stand regarding assets and liabilities and equity.
- Cash Flow Statement: Cash flow is the lifeblood of any business, and this statement shows the money that is going out of the business and the money that is coming in. This also covers a certain time period. This statement leaves you knowing where you stand when it comes to the cash you have available to you.
Set up a time to meet with your accountant to make sure you are receiving and reviewing this documents at the proper times. As always, if I can help, please reach out .
Brian E. Ravencraft, CPA, CGMA is a Principal with Holbrook & Manter, CPAs. Brian has been with Holbrook & Manter since 1995, primarily focusing on the areas of Tax Consulting and Management Advisory Services within several firm service areas, focusing on agri-business and closely held businesses and their owners. Holbrook & Manter is a professional services firm founded in 1919 and we are unique in that we offer the resources of a large firm without compromising the focused and responsive personal attention that each client deserves. You can reach Brian through www.agribusinessaccounting.com or www.HolbrookManter.com.