Welcome back to Merger She Wrote! In this episode, host Paloma Goggins, founder of Nocturnal Legal, is joined by financial and bookkeeping expert Steven Bialecki to break down the financial numbers that matter most when buying or selling a business.

Instead of focusing on dry financial definitions, this episode walks through real-world case studies that reveal how financial statements can make or break a deal.

First, we examine a local pastry shop sale where the owner treated the business like a personal piggy bank. While the company was profitable, excessive owner draws made the financial statements look weak and nearly caused the buyer to walk away.

Next, we switch to the buyer’s perspective and analyze a cash-heavy hair salon acquisition where messy bookkeeping, missing financial records, and unclear revenue reporting created serious due diligence risks.

If you want to understand how to read a profit and loss statement, interpret cash flow, and identify financial red flags before acquiring a business, this conversation is for you.

Whether you're a business owner preparing to sell your company or an entrepreneur looking to acquire a small business, understanding financial statements is critical to making smart decisions.

What You’ll Learn in This Episode

• Why treating your business like a personal bank account can hurt your sale value
• How buyers can identify owner draws and legitimate add-backs
• The key differences between a profit & loss statement, balance sheet, and cash flow statement
• Financial red flags to watch for during business acquisitions
• Why messy bookkeeping can derail deals during due diligence
• How professional bookkeeping and CFO advisory support helps prepare businesses for acquisition
• What journal entries are and why they matter in financial reporting

Resources Mentioned

Listen to more episodes of Merger She Wrote
https://www.mergershewrote.com/episodes/

Learn more about Nocturnal Legal
https://nocturnallegal.com/