Factors to Consider When Evaluating Your Small Business’s Financial Health – Infographic

The financial well-being of a small business can be interpreted in many ways, depending on its industry, stage of development, or how it has dealt with the difficulties. However, there are proven metrics that owners, managers, leaders, and other stakeholders can use in order to objectively evaluate the company’s financial health.

In this article, you may see some factors that you might consider when evaluating your business’s financial matters.

Income Statement

An income statement is a financial report that indicates how profitable your business has been over a particular reporting period. It shows your revenue, less your expenses, and your losses.

Typically, small business owners are starting to produce an income statement when a bank or an investor wants to see how profitable your business is.


Business expenses are any costs that are sustained during the normal course of business. These expenses can be applied to both small and large businesses. The income statement includes business expenses. To calculate a company’s net taxable income, business expenses must be subtracted from the revenue.

You must know your expenses when you have a business as this is an important part of evaluating your financials.

A business owner must be very transparent about their business as this helps a lot in liquidating their assets. A responsible entrepreneur should also know the basics of accounting and bookkeeping as this can help them better understand the business flow.

In case of doubt and expertise in this field, you can try using the best accounting software for small business and an invoice maker to make your business journey a little easier.

It is indeed hard to start and manage your business, but as time goes by, you can definitely operate it to the best of your ability as you just have to equip yourself a proper knowledge and tools in the business. For more knowledge about the things that you must consider in evaluating your business’s financial health, click this infographic brought to you by KIPPIN.

Factors to Consider When Evaluating Your Small Business