Cash Flow Statements

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

Most business owners look at their P&L, some business owners look at their balance sheet, but virtually no business owners look at their cash flow statement.

My name is Michael Barbarita from Next Step CFO providing outsourced CFO Services with your know your numbers minute.

In order to run and manage a business effectively, the business owner needs to look at all three financial statements.

That’s the P&L, balance sheet, and cash flow statement.

Omitting the cash flow statement is the reason why business owners don’t know where cash, the lifeblood of any business, is going.

The Cashflow statement can be hard to read but the cash flow statement in quickbooks starts with net profit, and then it adds back depreciation and immunization and the rest of the numbers are the changes in the balance sheet accounts for the date range requested, and those changes are either sources of cash, which are positive changes, or uses of cash, which are listed as negative changes.

By reading the cashflow statement, you’ll know where cash is going.

And remember, the most successful business owners know their numbers.

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