Financial Statement Fundamentals
Show Me the Money!
Many of us remember Cuba Gooding Jr.'s immortal line from the movie "Jerry Maguire," "Show me the money!" Well, that's what financial statements do. They show you where your practice's money comes from, where it goes, and where it is now.
There are three main financial statements: (1) balance sheets, (2) income statements, and (3) cash flow statements. Balance sheets show what your practice owns and what it owes at a fixed point in time. Income statements indicate how much money a practice made and spent over a period of time. Cash flow statements reflect the exchange of money between your practice and the outside world also over a period of time. Let's look at each of the three financial statements in more detail.