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Last Update: Tuesday June 15, 2021

Key Idea: Learn how to analyze your financial statements

Financial Statement University.  Here Nani Waddoups, who owns R. Wagner Arts in Portland, Oregon,  admits that her gross margin is too low.  More...

Key Question:


Jim Schell was amazed by what he discovered when he started as a volunteer to help small business owners work through problems. He learned that most business owners don't understand how to read a financial statement.

Q: What is FSU and what can you learn there?

A: Jim created FSU and it stands for Financial Statement University. This is an imaginary place you can create for yourself by reading, talking to your CPA or banker, or by taking a class in accounting. Jim's book, Understanding Your Financials, is an excellent place to begin because it it simple.

You heard in this episode that financial statements have three parts and those are: The Balance Sheet, The Profit and Loss Statement and The Cash Flow Projections. Jim says, "The Balance Sheet tells us where we stand today. The Profit and Loss tells us what we have done in the past and the Cash Flow Projections predict the future." Put that way, one would think that every business owner would want to live, breathe, eat and sleep the financials.

Think about it

How often do you create financial statements and how do you use the information?

Clip from: Learn to Use Your Financials; Track your Numbers

USA and around the world:  Let us all get our houses in order!  Keeping track of business... it is the job of everyone in a business  The best way  to do it is to read, grasp and act on those monthly financial statements. If you share that information and give everyone bottom line accountability through the key ratios, your business will rally. You'll see an impact immediately!

In this episode you meet three small business owners. Two have gotten control of their financials and one is working to do better.

Unfortunately, most of us do not work closely with our financial data.  We all must.  With all the features built into today's accounting software programs (be sure you have your latest upgrades), any owner should have the numbers they need to run their business with the push of a button.

R.Wagner Company

Nani Waldoups, Artist + Producer

2136 N. Flint Avenue
Portland, OR 97227

Visit our web site:

Office: 503-224-7036

Business Classification:
Arts: Specialty Finishes & Construction

Year Founded: 1976

Learn how to analyze your financial statements

HATTIE: What is  FSU  and who needs to go to FSU?

JIM: FSU is an acronym for Financial Statement University. Who needs to go there? Anyone, repeat, anyone who is in a position to consult with or help small businesses. The theory behind all this is you cannot help small businesses without first knowing how to read their financial statements.

HATTIE: (In the Studio) Jim reminds us that our financial statements have three parts. The Balance Sheet tells us where we stand today. The Profit and Loss tells us what we have done in the past and the Cash Flow Projections predict the future.

JIM: The balance sheet gives you the financial status of your business today. The left side basically shows you what you have, all of your assets and the right side shows who owns those assets. Part of them are liability; part of them are net worth. The liability part means somebody else owns them the net worth means you own them. If you have a million dollars in assets and your liabilities are $400,000 and maybe it's a bank loan or maybe it's your vendor's payables then the vendors and the bank own $400,000 or your million bucks and you own the other $600,000.

HATTIE: (Voiceover) Jim and I met at R. Wagner Arts in Portland, Oregon and owner Nani Waddoups gave us a tour. Her company specializes in custom finishes for interiors.

JIM: I am wondering if you use your financial statements regularly to manage your business.

NANI: I do. Primarily I use our Profit and Loss statements.

JIM: How about your balance sheet?

NANI: I don't use my balance sheet very much.

HATTIE: (Voiceover) Jim asked Nani what her gross margin is on most jobs.

NANI: Probably about 25%

JIM: Very low, right?

NANI: Very low.

JIM: What was it a year ago?

NANI: Couldn't tell you.

JIM: So you don't know your trend whether you're improving or not.

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