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Davenport Finance – Statements to Figure Out Financial Liquidity

A long-term goal of a company revolves around not only achieving, but also maintaining, financial liquidity. In short, this refers to a company’s financial obligations related to its conduct. If you want to estimate or assess your company’s financial liquidity, you need to take a look at the following statements: balance sheet, profit & loss statement, and cash flow. These statements analyzed as a whole will help you figure out the financial condition of your company. Davenport Finance specializes in this.

The balance sheet statement has a list of assets and sources of financing assets – which are known as liabilities. The balance statements are usually settled when a financial year ends but can be taken a look at, at any time. The profit and loss statement lists all financial operations, listing all incomes and expenses. The cash flow statement is exactly what it sounds like – it lists all inflows and outflows of the business. By looking at all of these statement as a whole, you will be able to determine if your business has been able to maintain financial liquidity and where your company may fall short.

In most cases, companies choose to hire a professional who has been trained to properly analyze and interpret all of the statements to come up with the current financial situation of your company. A professional will also be able to recommend plans to help restructure particular areas that might not be bringing in profit. It is also beneficial to have a professional do this assessment so they can look at everything in an objective manner. When hiring the professional for this job, be sure to ask for references and see what other companies they work with. It is important to find out what companies they have helped in a positive manner, as well.

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