From the course: Finance Foundations for Solopreneurs
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Profit and loss statements and balance sheets
From the course: Finance Foundations for Solopreneurs
Profit and loss statements and balance sheets
- Solopreneurs usually don't spend enough time examining their financial information. They might not think it's worth the time because their business is smaller, or it may seem like it's only something required for loans, financing, and investors. For others, it might just be scary. A lot of numbers that you hope mean you're making some money. But here is the deal, you don't have to be an expert, it's just a good business practice to quickly look at your profit and loss, or P&L for short, and balance sheet, in order to understand the financial health of your business. Let's talk about how you can do just that. The P&L summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year. Now, it's meant to draw a comparison of what you are either keeping or losing when it comes to income. You may have heard me mention in another video that top line growth is critical for the solopreneur. That being said, profit is what you keep, and the P&L…
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