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Learn the basics of financial statements from Circle City Broadcasting’s CFO

Ty Shea, Chief Financial Officer for Circle City Broadcasting, joined us today for this week’s “Accounting and Bookkeeping” segment. He compared a business’ financial statements to a report card, and stressed the importance of these documents when a business is seeking outside funding.

Shea broke down a balance sheet, which uses the formula “Assets = Liabilities + Owner Equity.” It is a snapshot of a certain time period of how a business is doing from an asset and liability standpoint.

This differs from an income statement, which spans a longer period of time. It is an accumulation of a business’ revenue minus expenses. Additional financial statements that may be reviewed are a statement of cash flows and a statement of owner equity.