Could We Be Reading Our Financial Statements Wrong All This Time?

I think that's a question that we all need to answer, each and every one of us. Especially, if we are either leading a business or are in ownership or in a position where we make financial decisions for a business. Now, here's where we would probably be very different in thinking to traditional accounting.

Okay. Let me paint a scenario for you. Let's say you've got a business that's doing it tough. Obviously, in tough economic circumstances, difficult decisions need to be made to be able to turn this business around into a profitable one. Naturally, the first thing we would probably focus on is the Profit and Loss statement, and the Balance Sheets. On the Balance Sheet, you'll see the Assets and the Liabilities. The Profit and Loss statement will reveal the Expenses and the Income that's coming into the business.

One of the first things we look at when we're trying to turn any business around or make changes as a leader, CEO, or as an Executive who's in a position of authority, is...

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