STARTING IN THE SEPTEMBER 2024 Pulse, business and financial strategist Ibanessa Soto Hogan presented four essential financial documents every spa business leader should understand to ensure sustainable success. These tools help spa owners and directors monitor performance, plan for growth and make informed decisions.

The Financial Documents series aimed to demystify finance. Here’ s a quick recap of the documents and their importance:

1. BALANCE SHEET

Why it matters:

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Provides a snapshot of your spa’ s financial health by summarizing assets, liabilities and equity. l Helps assess liquidity, long-term stability and overall fi- nancial equilibrium.

KEY TAKEAWAY: A balanced sheet reflects the financial wellness of your spa, ensuring it can meet obligations while supporting sustainable growth.

2. INCOME STATEMENT

Why it matters:

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Reflects your spa’ s financial performance over a specific period by capturing revenue, costs and expenses. Guides profitability, investment potential and budgeting decisions.

KEY TAKEAWAY: Key takeaway: A well-managed income statement ensures financial clarity, enabling your spa to identify opportunities, address challenges, and achieve sustainable growth.

3. STATEMENT OF EQUITY

Why it matters:

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Reflects the portion of the spa’ s value belonging to the owner( s) after all obligations are settled. Provides insights into financial stability, resource efficiency and capital structure.

KEY TAKEAWAY: A strong statement of equity enables spa owners to make informed decisions about reinvestment, growth opportunities and maintaining financial health.

4. CASH FLOW STATEMENT Why it matters:

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Tracks the movement of cash into and out of the spa, offering a clear picture of liquidity and financial health. Provides insights for budgeting, managing expenses and planning investments or expansions.

KEY TAKEAWAY: Understanding operating, investing and financing activities through the cash flow statement empowers spa owners to manage cash effectively, ensuring the business remains sustainable while pursuing growth opportunities. n

IBANESSA SOTO HOGAN is a business and financial strategist for spa and wellness industry companies. She is the founder and owner of Masterpiece Accounting Services and an associate professor of tax and accounting at Monroe College. She holds a Bachelor of Public Accounting and an MBA in Accounting, and is a licensed tax professional / enrolled agent( EA) and a certified professional business advisor( CPBA).

REVIEW THE FULL FINANCIAL DOCUMENTS SERIES

THE FINANCIAL DOCUMENTS SERIES began in the September 2024 Pulse and concluded in the February 2025 issue. ISPA members have access to all content in the Pulse archives. Visit pulse. experienceispa. com.

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