Balance Sheets’ Unbalanced Views
A Balance Sheet is often referred to as a snapshot and with good reason. It looks at a business on one day of the year and as such can be quite misleading.
Do you ever ask yourself why that company has chosen that year-end? Most businesses will choose a year-end that makes their figures look better.
“Are we making money?” is a statement often heard on Boards. What does that mean? Do they mean profits or cash? Or both?
Profits and cash are different things; a business can be profitable and cash negative, and vice versa. Remember…”You only run out of cash once.”
Ask us about how we can equip you to gain a balanced view.