know your numbers!
Post on 18-Nov-2014
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Do you know the ______?
(Numbers!)
Financial Statements, Balance Sheets! Cash Flows!!
You are not your company – meaning?? You get sued under
your name and the company gets sued under the company
name
Law Enforcement
Help! I can’t leave my company behind
Yes, you
can !!
Law EnforcementYour company
can get punished independently of you
Know the period for which your f inancial statements are
made up for! !
Understand that your Balance Sheet or Profit & Loss or Income Statement is always made up for a certain period – generally 12 months.
All the figures would be for this specific period. The balance sheet is a position document that shows the position of your assets and liabilities on a particular day!
FINANCIAL
STATEMENTS FOR THE
PERIOD 1st JANUARY
2011 TO 31st
DECEMBER 2011
For me Asset and Liabil i t ies mean – Eh!!
Asset?!?Liability!
I t is good news when you have more people owing you money than the
other way round
Receivables Payables
You will find these items in your Balance Sheet. Receivables on the Asset Side and Payables on the Liability/Equity Side
Fixed Costs – These are your costs for keeping your off ice open! So
unt i l you c lose down operat ions, they aren’ t go ing anywhere
Office Rentals Maintenance
Some staff costs
All these expenses sit in your Profit & Loss Accounts. Search them out and identify what your business cannot survive without!
Check how much money you have in the bank – th is is the amount you
can actual ly cash out in case you need to!
There would be one line item in your Balance Sheet called “Cash and Cash Equivalents”.
Under this head you will find all those assets which are readily convert able into cash. Money available in your bank account sits right in this account
Understanding your tax obl igat ion – The amount that is expected to be
paid out in taxes every year s i ts r ight in your Balance Sheet . Search i t
out and avoid surpr ises!
There would an item under the head - Tax Payable or Tax Liability in your Balance Sheet on the liabilities side, this is the approximate amount you should be prepared to pay as your tax!
The big question of Equity? What does Equity
really mean
As the owner of the Company, all the money and the assets you bring into the company should be returned back to you one day. This “Owings” from the company to you comprise Equity.
It could be the money you bought in for set up/ capital. The assets you gave the company etc.
Get professional help to understand your
numbers
+65 -62212440
team@servolve.com
28 Maxwell Road, 03-05, Red Dot Building, Singapore - 069120
.Disclaimer
Servolve intends this document only as information material and will not be held liable for any loss incurred by any person/ organization based on the information provided in this document. No part of this document may be reproduced by any unauthorized means by any unauthorized person/s . Any person wishing to use the document is needed to seek prior permission from Servolve in writing . All images are courtesy of Creative Commons / Microsoft Office Clipart
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