An overview of your business’s financial position on the day the statement is generated.
Assets – Money in the bank, property, and equipment owned by the company.
Liabilities- Money you owe other people (loans, taxes, rent, etc,)
Equity – Money currently held by the company (retained earnings, operating capital, stock)
Equity – Liabilities = Assets
In other words, Assets are what you actually have to work with.
Your Profit + Loss
A rundown of the money that came in and went out during the month.
Revenue – What you earned from the sale of goods and services.
Cost of Sales – Supplies needed to produce and deliver your product.
Gross Profit – What’s left after you subtract the Cost of Sales from Revenue.
Other Income + Expenses – All other sources of income and costs of doing business; if the number is in parentheses, it is subtracted from Gross Profit.
Net Income – What’s left after you add Other Income and subtract Other Expense items from Gross Profit.