How do you measure the success of your company? If you’re like many small-business owners, you rely on two traditional financial reports: the balance sheet and the income statement. The first tells you what your business owns and owes at a particular point in time, and the second tells you what profit you’ve made over a period of time.
Although both remain important, four other tools and metrics can help you gauge how your business is faring.
1. Cash-flow statement — The cash-flow statement is often treated as the red-headed stepchild of the two main financial reports, but it provides more information than either one. If you’ve ever wondered at the end of the year where all the money went, then this is the report for you.
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