Cash accounting and accrual accounting both need to be understood in their basic forms to give CEO’s an understanding of the difference between profits and cash flow.
An income statement can be thought of as having a bottom half and a top half. Strategically this is a much better paradigm than debits and credits. It give CEO’s a way to dissect their organization’s performance into two fundamentally different ways.
Too many business owners don’t understand the balance sheet. That’s because most explanations start with terms like assets, liabilities and equity. I break it down in very simple terms to give you a solid foundation for just what a balance sheet does and what it means.
