Taking time to read your financial statements might not be the most exciting part of running your own business, but they are a key reporting tool that help you understand the state of your business and where it’s going. Your financial statements are also an essential tool to help you make important business and investment decisions, such as cost management, continuing or discontinuing a business operation, mergers and acquisitions, forecasting, and buying or leasing equipment.
There are four main financial statements:
- Balance Sheet
- Profit and Loss
- Retained Earnings/Deficit, and
- Cash-Flow
To help you grasp a better understanding of these statements, here are the answers to the five most common questions small business owners ask their accountant.
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