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Financial Statements

How do you know the boat will float?

The three main financial statements are the income statement, balance sheet, and cash flow statement.

Primary​

  • Profit and Loss: Profitability.
  • Balance Sheet: Financial position.
  • Cash Flow: Liquidity

Supporting​

  • Statement of Changes in Equity: This shows changes in the owners' investment in the company over a period of time.

  • Budgets and Forecasts: Projections to guide strategic financial decisions.

  • Invoices and Receipts: Essential for tracking revenue and expenditures.

Records​

Ledger​

This is a record of all the company's financial transactions, organized into different accounts based on the type of transaction (e.g., sales, purchases, payroll).

Bank Statements​

These are records of all the company's bank transactions, including deposits, withdrawals, and any fees or interest.

Insurance Policies​

Businesses should keep copies of all their insurance policies, as well as any claims they have made.

Financial Model​

Detailed projections of your startup's revenue, expenses, and cash flow. This helps in planning and decision-making.

Risk Mitigation​

An analysis of potential risks to your business and strategies to address them.