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North Country Alliance
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Financial Analysis
In addition to the
"Five C's," a prospective lender will use four primary financial statements
to make a credit decision.
- Personal Financial Statement indicates your net worth. A
personal financial statement is important to the lender, particularly
if you have never received financing for your business before, because
it gives the lender evidence of personal assets you could pledge to
secure a loan.
- Balance Sheet is an itemized statement that lists the total
assets, liabilities, and net worth of a given business to reflect
its financial condition (net worth) at a given moment in time.
- Profit and Loss Statement (P&L) shows the profit or loss
for the year. The profit and loss statement, also called the income
statement, takes the sales for the business and subtracts the costs
of goods sold and other expenses.
- Statement of Cash Flow presents the sources of cash in your
business - from net income, new capital, or loan proceeds, versus
the expenditures, or uses of the cash, over a specified period of
time.
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