How Much Is Your Franchise Actually Worth?

How Much Is Your Franchise Actually Worth Let's look at the differences between income statements and balance sheets , and what you can learn from them . Balance Sheet The balance sheets pulls together three things : what your business owns ( assets like property , equipment and inventory ) ; what it owes ( liabilities including loans , expenses , payroll ) ; and what's left after liabilities ( your equity as an owner ) . In addition to tracking assets , liabilities and the resulting equity , the balance sheet shows the total worth of a company , not just how it's doing on a particular time period ( like the income statement ) . Vs Income Statement The income statement shows you your bottom line , which is your revenue minus expenses - profit - during a specific period . It's a great way to see the impact of certain costs ( e.g. , looking at your biggest expenses ) on your bottom line . But just knowing dollars in , dollars out , and what's left over every month won't tell you what your company is actually worth . To do that , you need your balance sheet to show you the big picture . Looking at both your income statement and balance sheet is super important . It can show you red flags , like the fact that perhaps your liabilities are higher than your assets . To a potential buyer of your franchise , that would show a weak financial position . Main Line 1 ( 323 ) 886-7700 1 ( 877 ) 704-0514 Keep your financials current and accurate ! Fax 1 ( 818 ) 707-202-6086 thebookkeepersrus.com