Tutorial of a Small Business Balance Sheet

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A balance sheet is the best friend of anyone running their own small business. Get a tutorial of a small business balance sheet with help from a business consultant in this free video clip.

Part of the Video Series: Finance & Business Advice
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Video Transcript

Hi, my name is Alexis Guerreros. I'm a businesses consultant. Today, I'm going to talk to you about a small business balance sheet. Now a balance sheet is really a snapshot of the health of your business. It's broken down into three different categories. You have your assets which are things that you own that are positive, net worth or that you can sell within the next twelve months to be converted into cash and obviously that's also cash. It's broken down after that to your liabilities which are things that you owe or that you're going to owe within the next twelve months. Once you deduct your liabilities from your assets, you're left with your owner's equity also known as your net worth. Now if you own a business this number right here is frankly the number to use to consider how much your business is worth. Your net worth is the net worth of your business and seeing everything that you own that's considered a positive including cash in your accounts or anything that you can sell or can convert into money over the next twelve months minus everything that you're going to owe out within that same amount of time is what your net worth is. Something very simple, something you might want to take a look at once a year, throughout the year to make sure that your numbers are staying in the general direction that you want to go and obviously you want to have a positive net worth because that's a profitable business. And if that's the case, you're doing pretty good. Good luck out there.

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