Understanding your financial statements

By Brian Ravencraft

Every agribusiness owner and farmer needs to understand the importance of maintaining and reviewing financial statements.

Think of these statements as a map of where the money for your business is coming from and where it is going. These statements are true records of your financial activity. These are the documents that let you understand the financial health of your business and allow you to make smart financial moves in the future.

These are the three types of financial statements:

Income Statement: This statement displays your company’s new income growth or loss. The statement covers a certain period of time. You may hear your accountant refer to this as your profit and loss statement. Or “P&L” for short.Balance Sheet: This document looks at your business’s net worth at a given point in time. This is the document you turn to when you want to get a feel for where you stand regarding assets and liabilities and equity.… Continue reading