Learn to analyze your financial health with income and expense statements and balance sheets!
In school, academic performance has always measured the performance of a student. If you have a high score, you will say that your grades are good. If you score low, then you say that your grades are poor, then, go into the society. , what will measure your score?
The answer is: income and expenditure statement (also called cash flow statement) and balance sheet!
Isn’t this a business that measures performance? Isn’t it only used in the enterprise? NoNoNo… This is to say that we have always been wrong! It’s no wonder, because many people always think that only those who study accounting need to understand them!
In fact, the income and expenditure statement and balance sheet are just like your transcripts measure your scores. These two tables measure your financial health…
The income and expenditure statement can judge your income and expenditure. According to the response of the table, we can make corresponding adjustments! For example, if your income
Balance Sheet: Measure how many assets and liabilities you have, and if your liabilities> assets, then your financial situation is very bad! ! You must work hard to reduce debt, buy more assets, and get your finances healthy!
So these two tables are like financial doctors, able to reflect a lot of financial information and financial problems, we should develop the habit of doing financial statements, every month, every Make a quarterly, annual balance sheet and income statement, then analyze it every month and make adjustments! Let your financial status be the best…
When your income is> your expenses, you are not far from financial freedom… So, dear friend: Come on!