How to read the Profit & Loss, Balance Sheet and Cash Flow

Where to find them

Open Accounting > Reports. Under Financial Statements you have the four main reports. Click one to open it, choose the dates, and export or print it.

What each one tells you

• Income Statement (Profit & Loss) - for a period: revenue, cost of sales, gross profit, expenses and your net profit or loss. Are you making money?
• Balance Sheet - on a date: what you own (assets), what you owe (liabilities) and what is yours (equity). Assets always equal liabilities plus equity.
• Cash Flow Statement - where cash came from and went: operating, investing and financing. Profit and cash are not the same - this shows why.
• Statement of Changes in Equity - how the owner's equity changed, including owner withdrawals.

The Net Worth at the top of Accounting comes from the Balance Sheet.

Good to know

• Exclude inventory shows the figures without stock value - a view only, nothing is removed.
• Ask the accounts assistant (bottom right) to explain any figure in plain words.