Do your numbers support your mission?

Why Veteran Business Owners Need to Understand Their Financial Statements

Veterans make strong entrepreneurs. Discipline, mission focus, leadership under stress, and the ability to adapt are built into your DNA. Those strengths are why so many veteran owned companies succeed. But there is one area that can quietly limit growth if you ignore it and that’s understanding your financial statements.

You do not need to be an accountant to run a great business, but you should know how to read the numbers that drive it. Too many owners rely only on the bank balance or what “feels” right. The problem is that bank balances do not tell the full story, and feelings can lead you into trouble. Financial statements give you the real picture. They tell you if your business is healthy, profitable, growing, or silently losing money.

There are three primary financial statements every veteran business owner should be able to read and review each month.

1. The Profit and Loss Statement (Income Statement)

This report shows your revenue, expenses, and profit for a set period of time. It tells you if your business actually made money or just stayed busy. The key items to focus on are:

• Total revenue

• Cost of goods sold

• Gross profit

• Operating expenses

• Net income

Review this report to understand trends. Are sales growing or shrinking. Are material or labor costs rising. Are overhead expenses eating into profit. Many businesses sell a lot and still lose money because margins disappear. The Profit and Loss statement exposes that. Use it to adjust pricing, control spending, and measure performance month to month.

2. The Balance Sheet

If the Profit and Loss statement shows performance, the Balance Sheet shows financial strength. It lists what your business owns (assets), what it owes (liabilities), and the value of the company (equity). Key areas to watch include:

• Cash and receivables

• Inventory

• Loans and credit lines

• Accounts payable

• Owner equity

A strong Balance Sheet shows healthy cash, low debt, and solid working capital. A weak Balance Sheet shows cash struggles, high debt, and slow paying customers. If you want to borrow money, bid larger contracts, or partner with investors, this is the statement they study. Review it monthly to track improvement and prevent financial blind spots.

3. The Cash Flow Statement

Profit does not always equal cash. Many profitable companies run out of money because customers pay slow, inventory piles up, or expenses hit too fast. The Cash Flow Statement shows how money moved in and out of your business. It reveals whether you generated cash or burned it. You will see cash coming from operations, cash spent on investments like equipment, and cash used to pay debt.

This report helps you forecast future needs. If cash declined for two straight months, you can fix it before payroll becomes a problem. If receivables increased but cash stayed flat, customers may not be paying fast enough. Cash flow is survival. Knowing this report gives you control.

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How to Use These Reports Together

Each statement tells part of the story. When you read all three, you get a full view of your business.

The Profit and Loss shows performance.
The Balance Sheet shows stability.
The Cash Flow Statement shows reality.

Together they answer important questions:
Are we profitable.
Are we getting stronger.
Can we afford growth.
Will cash be tight next month.

You cannot answer those questions by guessing. You answer them by reviewing your financials every month, making decisions early, and adjusting before problems appear.

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Veteran business owner? Take command of your cash flow and tighten your financial systems. Join The Profit Platoon — a community built for Veterans.