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We have dealt with the difference between your income statement and your bank statement in a previous blogpost, so in this one we will deal with why there is a difference between financial profit and taxable profit.
While not all small business owners fully understand the Income Statement and Balance Sheet, most recognise them and have a broad idea of what they are and how to use them. However, the Cash Flow Statement is probably the financial report most responsible for confusion, blank looks and mild panic in small business owners. This is a shame, because it’s actually an extremely handy report that can give you some very valuable insight into the health of your business.
