We have already seen each component of the income statement. Now it’s time to move from what to how: how to read it, how to interpret it, and how to use it to make better decisions. A rigorous analysis goes far beyond verifying if there was a gain or loss: it is about decomposing the […]

A income statement follows a descending logical order. Each line reveals a part of the company’s value creation process. Understanding what each one means and how it relates to others is essential to correctly interpret the profitability of the business. 1. Operating income (net sales) They are the income that comes from the main business

Unlike the balance sheet, which is a photograph on a specific date, the income statement is like a film: it shows what happened to the company’s income, costs and expenses during a given period. The income statement —also known as the Profit and Loss Statement—is one of the three main financial statements, together with the

Seeing your balance clearly is like looking at yourself in the mirror: it shows you what is there, not what you would like to see. A powerful and strategic way to read it is to divide it into two large blocks: on the one hand, the sources of financing (liabilities and heritage) and, on the

To read a good balance first, you have to understand its architecture. Behind each figure there is a simple but powerful accounting logic that, once understood, will allow you to identify risks, opportunities and imbalances in the financial structure of your company. the base equation The basic balance sheet formula is simple but powerful: Assets

‘Accounting is the language of business. You can’t succeed in business if you’re not financially literate.’ — Thomas Ittelson The balance sheet—also known as the statement of financial position under IFRS—is one of the most powerful tools that financial accounting offers to understand, in monetary terms, the economic reality of your company. There are many