Sometimes micro and small entrepreneurs find financial reports too complicated with the excuse that they don't have time to study. The important thing is to sell, the important thing is profit. !
It's fine if you think financial reports are complicated, because you don't know how easy it is, it's only natural, if you study economics or financial management, starting from the term alone makes your mouth yawn, let alone starting to count, you feel sleepy.
In fact, learning is very enjoyable, including learning about financial reports, but there is even enthusiasm, because there are so many benefits and functions of financial reports. It is better to study financial statements to predict the company's future business, than to learn to predict the fate of companies using mystical and horror things.
An Example of the Benefits of Financial Statements
Fundamentally and most commonly, one part of the financial statements is a profit or loss report, the report is made hierarchically, at the top is sales or revenue, below it is the cost of goods sold, below it are expenses, below it is profit or profit or gross profit or it could even be a loss, after deducting more taxes, it can be called a net profit.
Such a hierarchical order has meaning and meaning behind it. The author sees the order of entrepreneurs in doing business, that's the order. When you start a business, you sell gas immediately, you want to use promotions, you want to use direct sales, of course you have to get sales in the first year, you have to break eggs, You have to be able to get consumers, even though the price of capital goods is still expensive, even though you have to spend quite a lot of money. The first year is usually tough right.
The next sequence is the cost of production, aka cost of goods, the price of the goods we buy for sales, in the first year, usually the supplier of the goods is not trusted, so we are given a high price, so in the second year, try to negotiate again or find a supplier of goods that are cheaper, what you bought anyway It's starting to increase in line with the increase in sales, so in the second year we can start recording an operating profit.
Entering the third year, costs can be reduced because you have learned efficiency and effectiveness in doing business, so in the third year you can get profit, you can start to have a good breath, you have started targeting fixed assets, such as land and buildings.
Closing
So it's easy if you understand what financial reports must be done, that's if the calculations are annual, monthly calculations are the same, the hierarchy will be like that, depending on the field of business or business sector, it's still a very small part of the financial report, the other parts with their benefits and functions are still a lot, there's no loss if you understand the financial statements.
From now on, don't ignore financial reports, are you still not curious about the benefits of financial reports? Indeed, financial reports are not important, but very important.
Wallahu a'lam bishawab