Interpreting Financial Statements: It's More Than Just the Numbers

No matter the size of your company, you should have some type of annual formal financial statement. This is helpful for your own analysis of profit and loss areas, but also as a tool to take to your banker in the event you want a loan. It is also critical when you want to sell your company or it can be a vital tool if you are thinking of purchasing another firm. You will benefit by looking for and understanding the footnotes on a professional financial statement. This understanding will alert you to potential red flags others may see in your own statement in addition to possible problem areas in those of others.