Financial Reporting

The Balance Sheet provides a picture of the Assets, Liabilities and Net Worth of the entity at a specific point in time while the Income Statement (and the more detailed Comparative Income Statement) provide the net income or (loss) for a period of time.

The key areas to focus on are the bank balance, unencumbered bank balance (from the balance sheet)  and net income (loss) for the month and year to date (YTD) from the income statements. Both monthly and YTD revenues and expense should be compared to budget and material variances investigated and appropriate action taken.

Net worth is the total assets minus total liabilities of an entity. It is shown as the total equity on the balance sheet.

The Bank balance shows how much cash an entity has.  The unencumbered cash is the bank balance less the current liabilities plus unearned revenue and thus it provides the amount of cash that would be available after all the current liabilities of the entity were paid.

The Contributed Capital is cash and assets provided to the entity from sources outside the operations such as proceeds given to a mess from the closure of another mess.

The gross profit on is calculated by taking the total sales less the total cost of goods sold.  The cost of goods sold is calculated using a cost multiplier percentage that is applied to each sale.