A balance sheet is a financial statement at a given point in time. It provides a snapshot summary of what a business owns or is owed (its assets) and what it owes (its liabilities) – at a particular date. The balance sheet shows how the business is being funded and how those funds are being […]
A cash flow statement tracks the anticipated flow of money both into and out of your business. It simply shows the timings that money will enter or leave your bank account. The spreadsheet we have provided includes a cash flow statement. The sales income will be automatically entered, based on the sales entered in your sales […]
The Profit and Loss account shows total sales, less the expenses for the business. This will either show a trading profit or loss. This is often referred to as the bottom line or Net Profit. It is this amount on which sole traders and partnership’s income tax liability is calculated (Corporation Tax for Limited Companies). […]
To get an initial “reality check” on the viability of a business it is useful to calculate the minimum number of sales needed to allow you to “draw” sufficient income to meet your “personal survival budget” after an allowance for tax. Consider the following example: The Village Store A couple were interested in buying a […]