Profits and Losses

You are buying a business presumably because you want an accurate
idea of what your profit will be. To figure this out, you need to get from the
proprietor the past five years’ worth of audited balance sheets, income statements,
and cash flow statements. Your accountant should review these. You
need a copy of the lease and any other contracts for which you will be responsible.
You need to get a list of assets and liabilities, receivables, and obligations.
You need five years’ worth of tax returns. Basically, you need all
records as they relate to the business, and you need to spend time analyzing
these records with your accountant.