Accounting For Dummies®, 4th Edition

16.10. Sound Like a Pro in Talking about Your Financial Statements

On many occasions, a business manager has to discuss her financial statements with others. You should come across as very knowledgeable and be very persuasive in what you say. These occasions include

• Applying for a loan: The loan officer may ask specific questions about your accounting methods and items in your financial statements.

• Talking with individuals or other businesses that may be interested in buying your business: They may have questions about the recorded values of your assets and liabilities.

• Dealing with the press: Large corporations are used to talking with the media, but even smaller businesses are profiled in local news stories.

• Dealing with unions or other employee groups in setting wages and benefit packages: They may think that your profits are very high so you can afford to increase wages and benefits.

• Explaining the profit-sharing plan to your employees: They may take a close interest in how profit is determined.

• Putting a value on an ownership interest for divorce or estate tax purposes: These values are based on the financial statements of the business (and other factors).

• Reporting financial statement data to national trade associations: Trade associations collect financial information from their members. You should make sure that you're reporting the financial information consistently with the definitions used in the industry.

• Presenting the annual financial report before the annual meeting of ...