Accurate financial statements are crucial when you’re trying to secure a small loan from a bank or seeking investors for your corporation. At Steward Ingram & Cooper PLLC, we offer Durham businesses the financial statement preparation they need to access financial data when they need it. You can also count on us for financial statement reviews, audits, and compilation.
Business Financial Statements
As a Durham business, there are four main financial statements you need. These determine your business’ financial health and help you plan for the future while satisfying creditors, stockholders, and potential investors.
Balance Sheet
A balance sheet gives an overall look at your company’s financial status during a specific time. It is helpful when evaluating the overall financial health of a business. The balance sheet reports the total assets, liabilities, and equity of a business at a specific time.
Income Statement
An income statement, also referred to as a profit and loss statement, shows exactly how much profit your business makes after subtracting all expenses from revenue. This includes payroll, rent, utilities, equipment, and inventory costs. Some income statements will take a closer look at revenue and expenses. This allows the business owner to see where they can trim expenses to make more profit. It also provides a view of what goods or services have the highest and lowest profit margins.
Statement of Shareholder’s Equity
Equity is a corporation’s net worth. It also shows how much each shareholder or owner would receive if all assets were liquidated and then divided according to the percent owned in the company. An equity statement shows changes in a company’s equity from one period to the next.
Statement of Cash Flows
The cash flow statement looks at how cash moves in and out of the business. It will also show how liquid assets, such as cash, are generated and used during a specific time. This is an important statement because investors and lenders look at it very closely to see what kind of operating costs and financial activities are involved in the business.
Why Are Financial Statements for Businesses Important?
Having a Durham CPA Firm generate your financial statements whether you have a thriving corporation or a sole proprietorship is important for several reasons.
Understanding Financial Health
You always want to have a clear picture of your business’ financial health so you know if you should be looking at growing your business and if you can withstand a rough patch. Your financial statements show trends as well as high and low revenue throughout the year. You’ll also have a good idea if you’ll be able to come up with cash quickly if there’s an emergency. You can use all of this information to help create budgets, plan for the future, and improve your operations.
Secure a Loan
Financial statements will be necessary if you need to secure a business loan. Banks and lenders will want to see these documents to determine whether you can pay back a loan or whether you’re a risk.
Reach Investors
Just like banks, potential shareholders and investors will want to see your financial reports to get a better idea of their investment potential.
Why Choose Steward Ingram & Cooper PLLC
Businesses in Durham, Raleigh, and surrounding areas have trusted our CPA firm since 2000 when it comes to providing comprehensive accounting and bookkeeping services, including generating financial statements. When you choose to work with us, you can feel confident that you will get accurate statements and have access to a financial partner who can meet with you and discuss the financial health of your business.