During the past few days I had been hooked up with Robert Kiyosaki – Choose to be rich, it is a 12 audio CD that covers pretty much Elementry Level in Financial Education.
The following article are taken from financialfreedomlibrary.com
Robert Kiyosaki stressed the importance of reading Financial Statements. When a person gets proficient at reading Financial Statements, that person is more equipped to be able to evaluate the fiscal health of a business before inves, or buying the company outright. Of equal value is the current business owner who knows how to read his own financial statements.
The keeping of regular Financial Statements enables a business to be able to spot trends in the company’s performance over time. If trends can be localized early enough, the business may begin to evaluate what factors led to the trend. If it’s a downward trend, the comapny might be able to reverse a previously made suboptimal decision, or further capitalize from upward trends.
Basic parts of the financial statement are as follows:
Income/Earnings Statement
Expense Statement
Balance Sheet
The first two are fairly self-explanatory. The balance sheet is a sort of snapshot of where your company is at the time you look at it. The balance sheet shows your company’s net worth, which in it’s basic form is income/assets minus expenses/liabilities.
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