Funding a New Business For Dummies

Chapter 18

Analyzing Financial Reports and Making Informed Decisions

IN THIS CHAPTER

Making sense of financial statements and reports

Creating metrics and key performance indicators

When you’re reading financial statements on your road to prosperity, it can often feel like traveling in a foreign country and being unable to speak the language. But you’re reading this chapter because you bought it or you’re thinking of buying it (we’d like that) and you want to translate these documents into words you can understand.

Come with us as we delve into the three fundamental pillars of financial reporting: the balance sheet, income statement, and cash flow statement. We expose their secrets and reveal the stories they tell about your business. And we know that you want to stay in the express lane, so we tell you what the statements are and what you and your team need to understand and show to potential investors.

After we finish your checklist, you’ll need to set up your financial metrics so you and your team know what’s going on and make sound decisions. Yes, that dinging sound means you guessed right — potential investors will expect to see this information when they’re kicking the tires on your business.

Making Your List, Checking It Twice

Your mindset is your greatest advantage, ...