You might be in the point where you are trying to figure out of how good is your corporation’s financial health. Of course, it is a must that you must carefully check your corporation’s financial health for if you do not, then, expect for the consequences of financial distress and misery.
In this era, you don’t have that luxury of living a life without any concern as to your financial health. But then, you will wonder how you are going to check your corporation’s financial health.
Do you need to see a doctor? Of course not, as the word suggests, in financial health, you need to focus on how your finances flow and this can be determined through financial statement.
To have a clear picture of what financial statement is all about, there is a need for you to know the concept of financial statement. Financial Statement will provide an overview of how much you owe and how much do you earn for a week and as well as your expenses to maintain your lifestyle.
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Financial Statement consists of two numbers, the first number will refer to the amount of how much you owe, or it refers to your indebtedness while the other set of number refers to the income that you derived as well as to your expenses incurred by you in order to maintain the kind of lifestyle that you have.
The combination of these two sets of numbers will give you the overview picture of your financial health.
It is a must that you know your corporation’s financial health for you will always be on guard if your corporation will still afloat financially or in the verge of insolvency. Your financial statement can also be used to obtain loans, credit and to provide an overall picture of the relationship between debt and income ratio.
Financial statement gives the picture as to the current financial status of the corporation and as well as to the activities of which the corporation is engaged into. It also gives information as to the ownership of the corporation and equity ownership. To prepare for financial statement for a corporation would require a meticulous work.
If you have a question on To make a Corporate Financial Statement, then consider the following helpful tips in making a financial statement for a corporation.
First, you must prepare a balance sheet, in this balance sheet it must reflect two sets of numbers, in the first set of the number, you must give the detailed information as to the corporation’s assets, this will include cash on hand, properties, account receivables, leasehold improvements and other asset that of value that will affect the corporation’s financial standing.
The entry should be put on the top of the page while on the other half of the page, it is the list of all the company’s liabilities, unpaid taxes and bills promissory notes and other corporation’s obligations.
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After the entry, you must subtract the company’s total liabilities from the company’s total assets in order to arrived into the company’s net worth. Then you can prepare the profit and loss statement for a certain period usually within a year. This will give you the overall picture of the financial health of your corporation.