To understand the profitability of their business, many CEOs will only look at the income statement at the end of each month. Why? Because the income statement tells them what they want to see – how much revenue they made and whether there was a profit – The Bottom Line.
But the income statement doesn’t show the whole picture of their business’s profitability. A good financial manager looks at both the income statement and the balance sheet. Every accountant knows you need an accurate balance sheet to have an accurate income statement.
If expenses and assets are not recorded properly, or are in the wrong place, both reports will be incorrect.
Here, GrowthForce president and CEO Stephen King discusses what you should look for.
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