Mastering Business Finance

 Excerpt  :

The decisions to hire, fire, buy, sell, start up or close down—all are financial nature. Almost any question that makes its way to your desk, and that requires a decision by you, can be put into financial terms.

In the strictest sense, the financial pro or officer in your company is still the one charged with making sure the company uses its assets to bring the greatest possible return on the money invested.

It should come as no surprise to you, then, that the basic tools of the trade used to carry out these tasks begin and end in dollar signs. They are called the balance sheet, the income statement and the statement of cash flows.

These financial statements are prepared by your accounting department or accountant on the accrual basis of accounting. According to the accrual accounting method, revenues are recorded when realized and expenses when incurred, regardless of the date when cash is actually received or disbursed.

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