Understand business numbers
Connect profit, cash and the decisions behind the accounts.
Your route through the ideas
- Income statement
A report of revenue, expenses and profit or loss over a period.
- Balance sheet
A snapshot of assets, liabilities and equity at a particular date.
- Accrual accounting
Recording revenue when earned and expenses when incurred, rather than when cash moves.
- Cash flow
Cash coming into and going out of an activity over a period.
- Working capital
Current assets minus current liabilities: a measure of short-term financial position.
- Break-even point
The sales level at which total revenue equals total costs under stated assumptions.