H O W T O U S E Y O U R B A L A N C E S H E E T T O A N A LY Z E T H E H E A LT H O F Y O U R B U S I N E S S

B Y S P E N C E R D U L A L - W H I T E WAY

W H E N R U N N I N G A B U S I N E S S , Y O U N E E D T O M A K E S U R E T H AT Y O U A R E I N T E R N A L I Z I N G T H E O V E R A L L VA L U E O F Y O U R C O M PA N Y.

B Y U N D E R S TA N D I N G T H E F I N A N C I A L H E A LT H A N D F I N A N C I A L P O S I T I O N O F Y O U R C O M PA N Y, Y O U W I L L B E A B L E T O M O V E Y O U R

B U S I N E S S T O T H E R I G H T PAT H F O R T H E F U T U R E .

O N E I N C R E D I B LY B E N E F I C I A L WAY T O E VA L U AT E Y O U R B U S I N E S S I S B Y A N A LY Z I N G Y O U R C O M PA N Y ’ S B A L A N C E S H E E T.

• A balance sheet is the primary financial tool for assessing the relative financial health of a business at any given point in time. Oftentimes, this is referred to a snapshot because it provides a business leader with a clear and accurate picture of where the business is at that current moment.

W H E N L O O K I N G AT Y O U R B A L A N C E S H E E T, T H E F I G U R E S A R E B R O K E N D O W N I N T O T H R E E F I G U R E S : A S S E T S , L I A B I L I T I E S , A N D E Q U I T Y.

A S S E T S A R E G E N E R A L LY R E F E R R I N G T O T H E E C O N O M I C VA L U E T H AT A N I N D I V I D U A L , F I R M , O R C O M PA N Y O W N S A N D C O N T R O L S .

L I A B I L I T I E S , B Y D E F I N I T I O N , A R E A C O M PA N Y ’ S L E G A L D E B T A N D E X P E N S E O B L I G AT I O N S T H AT A R I S E D U R I N G T H E C O U R S E O F A B U S I N E S S O P E R AT I O N .

E Q U I T Y I S F O U N D B Y S I M P LY F I N D I N G T H E D I F F E R E N C E B E T W E E N T H E A S S E T S A N D T H E L I A B I L I T I E S .

Once you have analyzed and understood the overall figures for your company, begin preplanning for any big expensive moments.

Review the quantitative monthly expenses through your liabilities and begin mapping out any future expenses for the year.

L A S T B U T N O T L E A S T, C R E AT E VA R I O U S F I N A N C I A L G O A L S F O R T H E 2 0 1 6 - Y E A R .