#financial-statements
Understand and prepare balance sheets, income statements, and cash flow reports
The Altman Z-Score combines five financial ratios into one number that predicted bankruptcy with 72% accuracy two years out. This guide covers the original formula, the Z' and Z'' versions for private and non-manufacturing firms, a worked example, and how to screen your own company, customers, and suppliers.
Common-size analysis restates every line of a financial statement as a percentage of revenue or total assets; trend analysis indexes the same lines across years. Together they expose cost creep, margin erosion, and balance sheet drift that raw dollars hide, and they make a $2M business meaningfully comparable to a $50M peer.
A practical guide to DuPont Analysis — how to split return on equity into net margin, asset turnover, and the equity multiplier (3-step), or further into tax and interest burdens (5-step), with worked examples, trade-offs, and the pitfalls that catch people who apply it mechanically.
A three-statement financial model links the income statement, balance sheet, and cash flow statement so one set of assumptions flows through all three — answering whether a business is profitable and when it runs out of cash. This guide covers the seven-step build order, the three links that make the model balance, and the errors that quietly break it.
A step-by-step guide to ASC 205-40 — how management evaluates substantial doubt about going concern within one year of issuance, which mitigating plans qualify, what to disclose under each of the three outcomes, and how to coordinate with auditors under AU-C 570 and PCAOB AS 2415 to land an unmodified opinion.
A practical guide for small business owners on building a three-statement financial model that links income statement, balance sheet, and cash flow into a single forecast — covering the eight-step build, runway calculation, and scenario testing.
A practical guide to ASC 820 fair value measurements for private companies, funds, and CFOs—how to classify Level 1, 2, and 3 inputs, build defensible Level 3 valuations for private equity stakes and earn-outs, write disclosures auditors accept, and survive scrutiny of unobservable assumptions.
A practical guide to designing a chart of accounts that produces useful financial statements — how to number accounts in increments of 10, when to use sub-accounts versus dimensions for locations and departments, and the year-end cleanup ritual that prevents bloat.
Nonprofits must report expenses by both nature and function under FASB ASU 2016-14. This guide explains the three functional categories, audit-accepted allocation methods like time-and-effort and square footage, and how to feed both the statement of functional expenses and Form 990 Part IX from one consistent system.
A practical guide to AR-C 70 preparation, AR-C 80 compilation, and AR-C 90 review engagements — what each delivers, typical fee ranges, and how private companies match the right tier to lender, surety, and investor requirements without paying for unused assurance.
How private-company controllers build the ASC 740 income tax provision—current and deferred components, valuation allowances, UTBs, and the new ASU 2023-09 disclosures that take effect for fiscal years beginning after December 15, 2025.
How private company controllers can build a clean ASC 740 income tax provision in 2026 — current and deferred tax, Schedule M-1 reconciliation, valuation allowances, uncertain tax positions, and the new ASU 2023-09 disaggregated income-taxes-paid and qualitative rate disclosures.
