Most Important Financial Statement

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In life there is one financial statement that is far more important than any other financial statement whether it’s your personal life your own business whether you’re looking to make an investment in a company there’s one financial statement that trump’s all i’m gonna share that with you guys today good day subscribers thank you so much for joining me today in the

Financial education channel so first off i am so sorry for only posted in one video this week i only post it one video is called the key to investing it was a very important video but that was the only video i posted and i try to post five a week as i’ve told you guys in the past just this week was insane busy with my business with doing video jobs photography jobs

It was just nuts but no excuses i need to man up i need to get my videos done so it’s personal finance friday so today i’m doing a video that can be referenced as a personal finance video but this video should also be applied if you have your own business if you’re starting a business or if you’re looking into a company to invest them and it’s the most important

Financial statement out of all them so there are basically three different financial statements available one is called the income statement income stay meant that’s my sloppy handwriting for those of you have never seen income statement what that is is that’s basically the revenue you have coming in and then – and off all the different expenses and then what do

You have at the end of the day for gross profit or gross loss whether you made money or lost money that’s what the income statement is all about now that could be applied to your business to your investment you’re looking into making or into your own personal life because you have income coming in you have expenses what do you have when it’s all left over worth in

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The date you have any gross profit do you have any money to put towards savings or is it all just go away after your check comes in the next type of financial statement we have is a balance sheet now what the balance sheet is that is basically what do you have for cash marketable securities meaning what do you have for stocks 401ks those kinds of things versus your

Debts at the end of the day are you net positive in your assets or you net negative meaning do you have more debts than you have assets or do you have more assets than you do debt that’s what the balance sheets all about and that’s gonna be the one we talked mostly about today because that in my opinion is the most important financial statement and we’re gonna go

Into depth on that in the last we have cash below that is the third type of financial statement cash flow and what cash flow is is basically where’s all the money going that’s coming in where is it moving to you know the different ways it’s being spent and what not moved around and the cash flow i would say is the least important i mean obviously all three of these

Are important you want to look at all three if you’re making an investment you want to look at all three if you have business you want to look at all three in your own personal finances but the one that’s most important is a balance sheet and i’m going to share with you why balance sheet is most important and what is specifically most important on the balance sheet

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Whether it’s your own personal finances or investments you’re looking at or your own business is basically let me erase this some of this so i can get a little room to write here you basically want to look at your cash how much money do you have in cash your liquid assets that you could turn to whatever you want tomorrow verse is you debt cash versus debt that’s

The most important thing on any of these different types of financial statements and it’s located in the balance sheet now the reason this is so important is because every decision you make in life or business makes is all going to be dependent on their financial structure and basically their cash versus our debt when you’re looking at your own life depending on

If you have a lot of cash laying around versus having a lot of debts like you have a big mortgage you have to pay cars you have to pay those will impact your whole thinking basically if you have a lot of debt you’re probably not gonna lose or you might lose your job you never know but you might not leave your job you might stay at your job forever and ever just

Because you have a lot of debts to pay you it’s not like you can just quit and try to go out and get a better job you have to stay there because you need to have a lot of debts to pay you don’t want to see your car repossession you don’t want to see that big house repossessed that stuff would be heartbreaking to you so you just stay in that job that you probably

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Hate and you never go to start that business you want to start you’re never going to try to get that other job you want to try to go get because you’re scared in the same thing a business does if a business is very in debt and they don’t have a lot of cash sitting around they’re gonna make decisions that are short-term thinking because they’re really in-depth they

Need to just do whatever it takes to get by get to the next day they’re gonna make decisions that might hurt the company long term but in the short term it just helps them out a little bit just to get by to live another day that is why that is the most important thing so the balance sheet of the three the balance sheets the most important and in the balance sheet

Cash versus debt that is what is the other change everybody’s like a business is like your own business think about it would you make decisions differently if you had a lot of cash laying around versus a lot of debt laying around you probably would and the businesses and the people that have more cash laying around they’re the ones that are always going to have

The advantage over those that have a lot of depth so think about that guys i thank you so much for joining me today guys subscribers thank you for watching as always if you haven’t subscribed you might want to subscribe to this channel because we talk about business financial markets and personal finances like we did today thanks guys and have a great day

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Most Important Financial Statement By Financial Education

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