Today’s topic as a small business balance sheet and regardless of how large or small your company is, you as the business enterprise owner need to be reviewing the business enterprise balance sheet on a regular basis. I will suggest monthly, at least in the beginning. The total amount sheet is among the Big 3 Financial Statements that tell the business enterprise owner how your company is doing. It tells the financial story of your business. Now unlike one other two statements the total amount sheet is just a snapshot over time as opposed to over a variety or perhaps a period.
You can produce yourself or have your bookkeeper your accountant create for you personally but they’re not going to do the analysis for you personally they’re just going to present you the numbers. You as the business enterprise owner need to be the main one accountable for knowing what the numbers mean for your business. Now the business enterprise balance sheet looks something like this. Either alongside or it can be done top and bottom like this. Either way it’s giving you the same numbers in the same piece of the story if it alongside or top to bottom is merely semantics and it doesn’t really matter now on the left side over here this is actually the what of your company and on the proper side this is actually the who.
Same over here. Now it’s called the total amount sheet because the total here equals the total with this side over here they’re in balance. Exactly the same number on both sides. It balances left and right or top and bottom. What these are the assets in your business. Assets are such things as cash, accounts receivable, the gear in your company, and the inventory in your business. Who side is split into two halves. The most effective half may be the liabilities. The folks you own money to; mortgages, leases, loans fall into that side. Then the underside part may be the owner’s part. Owners’ equity. This is your initial investment into the business enterprise and then any extra value that the business enterprise has over time will probably be reflected here. So if your company may be worth more overtime and hopefully it is going to be then this number will probably be going up.