Business Fluency Refresher: How comms should interpret financial documents

You already know that being an effective communicator starts with speaking to the needs of the business with authority and expertise, but everyone can use a business fluency refresher now and then — especially as budgets for 2023 are currently being negotiated. That’s why Karen Vahouny, communications consultant and adjunct professor at George Washington University, offered the Ragan community some reminders during a recent business fluency bootcamp.

Here are Vahouny’s tips for how communicators can interpret the core trifecta of financial documents: the income statement, the balance sheet and the statement of cash flow.

The income statement shows what an organization earned from its operations. This should illustrate where your income is coming from, what you are spending and what’s left.

Vahouny emphasized how crucial the income statement is for tracking performance. “It’s not the numbers by themselves,” she said. “It’s what’s the what are the numbers telling you. And it’s very, very helpful for budgeting for future planning for tracking, for asking the right questions when there’s differences between what you expect to get and what you did get in the various categories of revenues, costs and earnings.”