Why Your Cash Flow Statement Is Your Most Important Financial Statement
Cash is the lifeblood of your business - which is why the cash flow statement is the most important financial statement to generate and study. Without cash, your bills don't get paid, there's no new inventory coming in and you won't be getting paid either. Without good cash flow, your business doesn't have a secure future. Not The Whole Picture Yes, there are plenty of other important accounting statements that you may find helpful in running your business. Maybe you're working with income reports and are keeping an eye on accounts payable and receivable. Those statements still won't be giving you the whole picture. Missing Data Here are a few key pieces of data you may be missing without a cash flow statement: How much cash you have available to pay suppliers, bills or invest into business upgrades. How much money is tied up in the company and can't be used for the day-to-day operations. How many of your customers have actually paid for the p...