{"id":21800,"date":"2024-08-05T17:56:53","date_gmt":"2024-08-05T21:56:53","guid":{"rendered":"https:\/\/evol.wp.vortexdev.com\/?post_type=toolbox&p=21800"},"modified":"2024-08-05T17:56:57","modified_gmt":"2024-08-05T21:56:57","slug":"the-importance-of-knowing-how-to-read-your-businesss-figures","status":"publish","type":"toolbox","link":"https:\/\/evol.wp.vortexdev.com\/en\/toolkit\/the-importance-of-knowing-how-to-read-your-businesss-figures\/","title":{"rendered":"Financial statements: the importance of knowing how to read your business\u2019s figures"},"content":{"rendered":"
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Almost 50% of Qu\u00e9bec SMEs close their doors within five years.* Why? For S\u00e9bastien Giroux, the ability to understand a business through numbers may explain the unfortunate phenomenon.<\/strong><\/strong><\/p>

This is the theory he develops in a fascinating webinar as part of the 20 minutes CPA<\/em> series: 20 minutes CPA\u00a0<\/em>: \u00ab\u2009D\u00e9chiffrer un \u00e9tat financier\u2009\u00bb<\/a> (understanding financial statements)<\/em>.<\/p>

S\u00e9bastien Giroux, CPA, heads up his own accounting firm, Perseus Services-Conseils, the mission of which is to support SMEs and entrepreneurs in their management and accounting challenges.<\/p>

S\u00e9bastien has seen more than his share of SME financial statements and has analyzed thousands. And he has talked to as many entrepreneurs.<\/p>

His first observation: entrepreneurs are incredible when it comes to skills and knowledge directly related to their field of activity.<\/p>

His second observation: they are afraid of numbers. Perhaps even worse: they don\u2019t understand them very well. This in part explains the failure rate among SMEs, S\u00e9bastien believes, and his goal through this webinar is to \u201cmake people aware of the importance of knowing how to read financial statements.\u201d<\/p>

He recognizes that entrepreneurs are mainly interested in paying less in taxes. \u201cIt\u2019s often the only question that people ask my firm: \u201c\u2019How much tax am I going to pay?\u2019 I understand that it\u2019s an important question, but entrepreneurs should be a lot more curious about their financial results.\u201d<\/p>

Essentially, entrepreneurs should watch this webinar.<\/p>

A few definitions<\/h2>

What is a financial statement?<\/p>

A financial statement is a set of numbers from the past that provides information about what\u2019s coming. It\u2019s a sort of score you need to be able to read to know what notes to play to make music.<\/p>

For most entrepreneurs, financial statements are like Christmas: they come once a year. And yet, \u201cdepending on the sector of activity and type of business, it may be a good idea to issue financial statements more often, such as quarterly, or even monthly. This can provide a much more strategic view of the business, to see and prepare for any bumps down the road, and to better take advantage of opportunities. In other words, financial statements are as much about the future as the past.\u201d<\/p>

There are three types of financial statements, which are used in different situations:<\/p>