The document discusses key financial statements that provide information on a business's financial health and performance. It summarizes the income statement, balance sheet, and cash flow statement. The income statement shows revenues and expenses over a period of time. The balance sheet outlines a business's assets, liabilities, and equity. The cash flow statement reports cash inflows and outflows from operating, investing, and financing activities. Understanding these financial statements is important for business planning, monitoring finances, and identifying issues that could lead to business failure if not addressed.

1. The Financial Puzzle: Putting the Pieces Together

2. For Your Information
•Please complete your
registration forms
•Please mute or silence cell
phones
•Please ask questions
•Please introduce yourself &
your company
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3. Agenda
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An Overview of Financial Statements
What do they tell you
The Financial Statements
• The Income Statement
• The Balance Sheet
• The Cash Flow Sheet

4. Reasons People Fail
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Bizness | GTCC SBC
• FAILURE TO PLAN PROPERLY
• FAILURE TO MONITOR FINANCIAL
POSITION
• FAILURE TO KNOW COSTS
• FAILURE TO PRICE PROPERLY
• FAILURE TO PLAN CASH FLOW
• FAILURE TO MANAGE GROWTH
• FAILURE TO CAREFULLY STRUCTURE
DEBT
• FAILURE TO ESTABLISH GOOD
BANKING RELATIONSHIP

5. Reasons People Fail
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• Plan to Reinvest Your Profits
• Learn How to Structure Your
Bank Debt
• Look for Outside Equity

6. What are YOUR Business Costs?
• Rent
• Cable
• Internet
• Phone
• Website
• Business Cards
• Flyers
• Office Supplies
• Insurance
Bizness Branding Academy | Lady Bizness | GTCC SBC
• Services
• Gas
• Travel
• Hotels
• Business Supplies
• Advertisement
• Marketing
• Social Media
Accounts

7. The Income Statement
• Basic Income Statement Equation:
• Sales Revenue – Expenses = Profits
• Expense Categories: Cost of Goods Sold,
Operating Expenses, Interest Expense,
Taxes
• Profit does NOT equal cash; profit is an
accounting concept, not a substitute
for a bank statement
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8. Income Statement
• Income statement
• Profit and loss account
• Profit and loss statement(P&L)
• Revenue statement
• Statement of financial performance
• Earnings statement
• Operating statement
• Statement of operations
One of the financial statements of a company and
shows the company’s REVENUES & EXPENSES during
a particular period.
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9. Multi-Step Method Income Statement
Gross Sales - Cost of Goods Sold = Gross Profit
Gross Profit – Operating Expenses = Operating Profit
(Salaries/Wages, Payroll Taxes, Occupancy Expenses,
Advertising, Travel, Insurance, Utilities, Depreciation, etc.)
Operating Profit - Interest Expense =Earnings Before Taxes
Earnings Before Taxes -Income Taxes =Net Profit
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10. Balance Sheet
Basic Balance Sheet equation:
Assets = Liabilities + Equity
Assets are broken into different types:
• Current
• Fixed
• Other
Described in terms of ‘liquidity’
– lose liquidity as move from top to bottom
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11. Liabilities
• Liabilities
– What a business owes, financial obligations
• Current Liabilities
– Items that must be paid within 12 months
• Long-Term Liabilities
– Items that can be paid in more than 1 year
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12. Balance Sheet
Bizness Branding Academy | Lady Bizness | GTCC SBC
ASSETS
• Current Assets – Cash, A/R, Inventory, Pre-paid expenses
• Fixed Assets – Land, Building, Equipment, Fixtures (less depreciation)
• Other Assets – intangibles (good will, patent, customer list, etc.)
LIABILITIES
• Current Liabilities – A/P, Notes Payable, Current Por. L/T Debt
• Long-Term Liabilities – L/T Loans, Mortgages, etc.
EQUITY
• Owner’s Equity
• Retained Earnings
• Additional Paid in Capital
.

13. Cash Flow Statement
Bizness Branding Academy | Lady Bizness | GTCC SBC
• Shows how cash enters and exits via business
operations. Cash flow statements report a
company’s inflows and outflows of cash. This is
important because a company needs to have
enough cash on hand to pay its expenses and
purchase assets.
• While an income statement can tell you whether a
company made a profit, a cash flow statement
can tell you whether the company generated
cash.

14. Cash Flow
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• Cash Flows from Assets
• Cash Flows from Operations
• Changes in Operating Working Capital
• Changes in Long-Term Assets
• Cash Flows from Financing
• Increase Debt
• Increase Equity
• Pay Interest/Dividends
• Decrease Debt (pay it off)
• Decrease Equity (company buys back stock)

15. Bizness Branding Academy | Lady Bizness | GTCC SBC
Assets
Cash 375
Stocks/Bonds 20,000
Real Estate 142,000
Autos 25,000
Other 35,000
Total Assets 222,375
Liabilities
Notes Payable 7,500
Installment 14,200
Auto
Installment 15,000
Other
Mortgage 97,000
Unpaid Taxes 750
Total Liabilities 134,450
Net Worth $87,925
Total liabilities
& Net worth 222,375
Personal Financial Statement

16. The Financial Puzzle
Chisa D. Pennix-Brown, MBA
Info@LadyBizness.com
GTCC Small Business Center
336.334.4822 x 62001– Greensboro
336.454.1126 x 62001– High Point
Bizness Branding Academy | Lady Bizness | GTCC SBC