The Outline of Business is a tool used in accounting that provides a high-level overview of a company’s financial activities. It can be used to help assess a company’s overall financial health and identify areas where further analysis may be needed.
The Outline of Business typically includes four main sections:
1. Income and expenses – This section provides an overview of a company’s income and expenses, including revenue, cost of goods sold (COGS), operating expenses, and other income/expenses. This information can be used to assess profitability and identify areas of potential cost savings.
2. Balance sheet – This section provides an overview of a company’s assets, liabilities, and equity. This information can be used to assess financial stability and identify areas of potential financial risk.
3. Cash flow – This section provides an overview of a company’s cash inflows and outflows. This information can be used to assess liquidity and identify areas where cash management may be needed.
4. Financial ratios – This section provides an overview of key financial ratios, such as the debt-to-equity ratio, return on equity (ROE), and earnings before interest and taxes (EBIT). This information can be used to assess a company’s financial performance and identify areas of potential improvement.