Always Ready: Financials Iowa center for economic

Transcript:Always Ready: Financials Iowa center for economic:
Always Ready: Financials Iowa center for economic success Iowa Center for Economic Success Mission Our mission is to empower Iowans with the potential to succeed as they pursue opportunities for financial success. Priorities Education  Capital  Networking Our Why The Iowa Center is committed to empowering people to strengthen and stabilize their financial futures through business ownership and investment. It is our belief that to be successful in small business, one needs support in three core areas: education, capital, and networking. We have built key programs that support those core areas and empower individuals to succeed, families to prosper, and communities to thrive. Success to us is people supporting themselves and their families through the execution of their own ideas. Agenda of Topics Financial Statements – what are these exciting documents? Budgeting – predicting the future!? Recordkeeping – keeping track of all the boring stuff. Taxes and Compliance – playing by the rules. Financial Statements Income Statement – record sales (revenue) and expenses Balance Sheet – reports assets (what you OWN) and liabilities (what you OWE) Cash Flow Statement – records cash received and paid by the business. Financial Statements (cont.) Income Statement – record sales (revenue) and expenses during a period of time. Revenues – amount received from selling goods or services. Not money contributed by owner. Expenses – amounts incurred to operate/run business. Difference – is profit or net income. Example transactions – Financial Statements (cont.) Income Statement – Provided services to customers for: $5,000 Incurred expenses in running business in amount of: $3,000 Financial Statements (cont.) Income Statement – Revenue $5,000 Expenses 3,000 Net Income 2,000 Financial Statements (cont.) Income Statement – where does a business get this information from? For historical income statement – info comes from back statement and business credit card. For budgets – from market research about customers and competition as well as estimating necessary costs/expenses. Financial Statements (cont.) Balance Sheet – business as a point in time. Assets – items owned by the business Liabilities – amounts owed by the business. Equity – difference between Assets and Liabilities. Represents the owner’s share of business. Example transactions – Financial Statements (cont.) Balance Sheet – Cash $2,000 from the net proceeds (net income) from running business. Owner invested $5,000 in capital to get business going. Took out a loan for $10,000 from bank for investment and working capital. Bought a piece of equipment