Workshop · Strategy
A snapshot and a film
A balance sheet measures one instant and an income statement measures a stretch of time; most misreadings begin by confusing the two.
- Duration
- 3 hours
- Delivery
- On site · Virtual
- Participants
- From 6 to 18 participants
- Investment
- Request a quote
Investment depends on scope, number of participants and delivery mode. We prepare a proposal at no obligation.
The problem it solves
The statement arrives by email, gets opened on a phone, and the eye goes to the last line. If the number is positive, the month was good. That reading is fast enough to feel sufficient, and it is the reason two companies with identical profit reach December in opposite conditions.
The balance sheet fares worse: it gets filed without being opened. It is the document that says what the company holds and who it answers to, and it is almost never set beside the same document from last year, which is where it starts to speak.
Then comes the third problem, the one nobody mentions. Both statements rest on assumptions — when a sale is recognised, over how many years a piece of equipment is spread, what was judged collectible — and a reader who does not know which assumptions were made treats the figures as exact measurements of something that happened.
What it covers
The session works on real statements, unnamed, and on the participants' own when they choose to bring them. Each document is read separately and with its own question: the balance sheet answers what the company holds today and who it answers to; the income statement answers what happened over a period and at what cost.
Then they are read together. Profit with no balance sheet to support it is usually being financed by someone — a supplier still waiting, a lender, the owner — and that relationship is what turns two loose documents into a reading of the business. Comparison against earlier periods is practised here, because that is where a figure stops being a number and becomes a direction.
The final block is the most uncomfortable and the most useful: what these documents do not say. They do not say whether a customer will come back, what the company is worth, whether the price is right, or whether there will be cash available next week. Knowing where a financial statement stops prevents decisions made with the wrong document.
What participants learn
- Read a balance sheet by what the company holds, what it owes and what is left.
- Read an income statement separating what happened in the period from what carries over.
- Put the two documents together to see who financed the period's result.
- Compare each figure against its own history rather than an outside reference.
- Recognise the accounting assumptions shaping the figures, and ask about them.
Agenda
- The balance sheet as an instant: assets, liabilities and equity on one date
- The income statement as a period: from the sale to the result
- Why the last line is the least informative one
- The assumptions behind the figures: recognition, depreciation, estimates
- Reading both documents together: who financed the result
- Comparison against earlier periods and against the plan
- What a financial statement cannot answer
- Questions to take back to whoever prepares the statements
What the organisation leaves with
- A written reading of your own most recent balance sheet and income statement.
- A list of the accounting assumptions affecting your figures, checked with whoever prepares them.
- A period-comparison format to use each month.
- A list of the questions these documents do not answer, with the source that does.
Programme details
- Format
- Workshop
- Also available as
- Executive talk · Intensive workshop
- Languages
- Español · English
- Includes
- Participant workbook
- Action plan
- Post-training resources
- Facilitation
- ALUD Consulting LLC — Global Business Transformation.
Who it is for
- Owners who look only at the month's result and file the rest
- Partners and board members who approve decisions on those documents
- Area managers whose performance is judged on one line of the income statement
- Administrative staff who prepare information for the leadership team
Frequently asked questions
- Do we have to bring our own financial statements?
- It is not required, and it is where almost all the value sits. Prepared material works, but the reading that matters is of your own business. Anyone who brings theirs works on them, and nobody else sees them.
- Does this replace an audit or a review of our numbers?
- No. ALUD does not audit, review or certify financial statements, and this workshop issues no opinion on anyone's figures. It teaches you to read them. If your statements need a professional opinion, that is work for a licensed public accountant.
- Is it worth attending if our books are behind or incomplete?
- It is worth it for finding out what is missing, and not much more. With records that are not current the reading comes out honest but thin. Get the bookkeeping in order first and come back with documents that reflect the year.
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Read more →Request this programme
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