Understanding Financial Statements for NJ Small Business Owners

Know Your Numbers — The Three Core Financial Statements NJ Owners Should Understand

If you run a service-based business in Essex County, your bookkeeping software already generates powerful reports. But to manage your company effectively, you must understand the financial statements NJ owners depend on.

1️⃣ Profit & Loss (Income Statement) — A Key Financial Statement for NJ Businesses

Your P&L shows revenue, expenses, and profit.

It answers: “Am I making money, and where does it come from?”

Use it to monitor margins, rising costs, and seasonal trends.

2️⃣ Balance Sheet

A balance sheet summarizes assets, liabilities, and equity — what you own vs. owe. Review it monthly to measure your company’s health and debt levels.

3️⃣ Cash Flow Statement for NJ Small Businesses

Even profitable businesses can struggle if cash flow fluctuates. The cash flow statement tracks when cash actually moves in and out.

Syncing your inflows and outflows helps maintain steady liquidity.

CPA Tip:

Review your three financial statements together. The P&L shows performance, the balance sheet shows position, and cash flow shows solvency.

Translate Data into Decisions

If these reports seem confusing, we can help. Book a Free Consultation → with Gregory Monaco, CPA LLC in Livingston, NJ for expert analysis and guidance so you can make informed business decisions year-round.