In the startup era, it’s easier than ever to launch a new business.
With barriers to entry for new ventures at historic lows, it’s now extremely common to see aspiring entrepreneurs from all walks of life – including many without any type of formal business training.
Financial Statement Basics
Accounting may not be a glorified part of the modern hustle, but today’s infographic from The Business Backer shows why understanding and interpreting financial statements is important for any founder.
Whether you have the next big idea or find yourself grinding away at a side hustle, understanding the basics of business accounting will help you prepare for the next step of entrepreneurial success.
A financial statement has three main parts: the balance sheet, the income statement, and the cash flow statement.
It’s worth noting that 82% of small businesses fail because they experience cash flow problems, so the latter statement is of particular importance.
What They Do
Here are the basics on each type of statement, and why they are important:
1. Balance Sheet
The balance sheet presents a company’s financial position at the end of a specified date. It provides a snapshot of a company’s assets, liabilities, and shareholders’ equity. This statement essentially shows what a company owns and owes.
2. Income Statement
An income statement is a report that shows how much revenue a company earned over a specific time period. This is perhaps the most intuitive financial statement, as it ultimately shows the company’s profitability – a metric that even the most accounting-allergic business owner would watch quite closely!
3. Cash Flow Statement
A cash flow statement reports the company’s inflows and outflows of cash during a period of time. A company can be profitable, but still be experiencing cash flow difficulties. If not enough money is coming in the door, or if there is a significant lead time to receive revenue, then it’s possible for a company to not meet its short-term liabilities.
Visualizing Population Density Patterns in Six Countries
These maps show the population density of several countries, using 3D spikes to denote where more people live.
As of 2022, Earth has 8 billion humans. By 2050, the population is projected to grow to 10 billion.
In the last 100 years, the global population more than quadrupled. But none of this growth has been evenly spread out, including within countries.
This series of 3D maps from Terence Teo, an associate professor at Seton Hall University, renders the population density of six countries using open-source data from Kontur Population. He used popular programming language R and a path-tracing package, Rayshader, to create the maps.
France and Germany: Population Density Spikes and Troughs
Let’s take a look at how the population spreads out in different countries around the world. Click the images to explore higher-resolution versions.
France is the world’s 7th largest economy and second-most-populous country in the EU with 65 million people. But a staggering one-fifth of the French population lives in Paris and its surrounding metro—the most populous urban area in Europe.
Many residents in the Paris metropolitan area are employed in the service sector, which makes up one-third of France’s $2.78 trillion gross domestic product.
Unlike France, Germany has many dense cities and regions, with Berlin, Munich, Stuttgart, and Cologne all having over a million residents. Berlin is the most populated at 3.5 million residents in the city proper, and 6 million in the wider urban area.
That said, the relatively recent reunification of West and East Germany in 1991 meant that post-WWII growth was mostly concentrated in West Germany (and West Berlin).
Italy and Chile: Coast to Coast
In Italy, another phenomenon affects population density and urban development—a sprawling coastline.
Despite having a large population of 59 million and large metropolitan areas throughout, Italy’s population spikes are closer to the water.
The port cities of Genoa, Napoli, and Palermo all have large spikes relative to the rest of the country, as does the capital, Rome. Despite its city center located 15 miles inland from the sea, it extends to the shore through the district of Ostia, where the ancient port of Rome existed.
Meanwhile in Chile, stuck between the Andes to the east and the Pacific Ocean to the west, population spikes corroborate with its many port towns and cities.
However, the country is more concentrated than Italy, with 40% of its residents congregating around the capital of Santiago.
Turkey and Canada: Marred by Mountains and Climes
Though Chile has difficulties with terrain, it is relatively consistent. Other countries have to attempt to settle many different climes—regions defined by their climates.
Mountains to the south and east, a large, semi-arid plateau, and even a small desert leave few centers of urban growth in Türkiye.
Predictably, further west, as the elevation comes down to the Aegean and Mediterranean Seas, population spikes begin to heighten. The largest of course is the economic and cultural hub of Istanbul, though the capital Ankara is also prominent with more than 5 million residents.
In Canada, the Rocky Mountains to the west and freezing cold temperatures in the center and north account for the large country’s relative emptiness.
Though population spikes in Western Canada are growing rapidly, highly populous urban centers are noticeably concentrated along the St. Lawrence River, with the Greater Toronto Area accounting for more than one-sixth of the country’s 39 million people.
According to the World Bank, more than half of the world’s population currently lives in cities, and that trend is only growing.
By 2050, 7 out of 10 people are projected to live in cities. This congregation makes cities a beehive of productivity and innovation—with more than 80% of the world’s GDP being generated at these population centers.
It’s in this context that mapping and studying urban development becomes all the more important, particularly as policymakers try their hand at sustainable urban planning.
As Teo puts it:
“By showing where people are (and are not), they show us where political and economic power is concentrated, and perhaps where and who our governments represent.”
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