Unless you are an accountant, balance sheets are unlikely to hold any great fascination for you. It is far more exciting to pioneer your company into new frontiers. However, my advice is “Learn to love your balance sheet” nurture it, care for it and watch it grow. Because when you go to sell the business the buyers will be all over it and the chances are that the final deal will depend upon you being able to hit a particular balance sheet position at a particular point in time, and if you don’t, it could cost you big time. So long before that time, understand how your balance sheet works and try to hit specific targets for it, each quarter and each year.

Not only that, your bank manager always seems to have a healthy interest in your balance sheet and it is best to understand why.

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