Financial Statements

Financial Statements
Financial statements are developed from the general records discussed on the preceding two pages.
These statements are used to provide information for preparing tax returns. Even more importantly,
the use of these financial statements can help you see the financial condition of your business and
identify its relative strengths and weaknesses. The business owner who takes the time to understand
and evaluate his or her operation through financial statements will be far ahead of the entrepreneur
who is concerned only with the product or service.
We will now introduce you to the two principal financial statements of any business: the Balance
Sheet and the Profit & Loss Statement.