This week’s #BusinessTipTuesday we are talking about Math 2.0 Day celebrated on July 8th! Math 2.0 Day is believed to have begun back in 2009 to celebrate the blending of technology and mathematics. This day brings together mathematicians, innovators, educators, and policy makers and intends to increase awareness about the importance of math literacy and education. Math is extremely important in every aspect of life and just as important in a business owner’s life. Numbers are one of the most important elements of your business, and while some business owners would rather handle anything else, it is vital to have a basic understanding of what is going on financially in your business.
To start with the very basics let’s review financial reports. There are four main financial statements and they are: (1) balance sheet, (2) cash flow statements, (3) income statements, and (4) statements for shareholders’ equity. Balance sheets include detailed information about the company’s assets, liabilities, and shareholder’s equity at a fixed point in time. The cash flow statement simply reports the inflows and outflows of cash over a period of time. The income statement reports how much money was earned and expended over a period of time. Statement of shareholders’ equity show alterations in the interests of the company’s stakeholders over time. Most likely for your small business the first three statements will only apply and truly be essential. By having an accurate understanding of what these statements show and explain you have a solid foundation for the basics. Check out SBA’s blogfor information on the 3 Essentials Financial Statements for Your Small Business.
The information on financial statements just grazed the surface of finance and accounting. They both are very broad topics that can be kind of confusing, especially for those who just do not like math or numbers. But do not fear, there are plenty of resources out there that are available to help with all your accounting and finance needs. Here are a few great websites that have guides for Accounting and Finance:
- Accounting 101for Small Businessby QuickBooks
- Financial Management for Small Businessby SBA
- 8 Steps to Set Your Business Up for Successby SBA
- Financial Management Guideby Fundera
Additionally, the University of Scranton Small Business Development Center works with clients to better understand financing and accounting every day. Whether it is a question about a loan or setting up projections for your business plan, the SBDC would love to help with your business needs. Visit www.scrantonsbdc.comto see what we offer!
Danielle Guari
Business Consultant
The University of Scranton
Small Business Development Center
Image credit: freepik.com
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