Financial Statements
Financial statements are the primary result of accounting. The income statement, balance sheet and statement of cash flows are three financial reports small business owners can use to determine how well their business is operating. Business owners may be able to use basic financial ratios to break down their financial statements and compare the ratios to a leading competitor or the industry standard. These ratios often indicate a how well the company generates profit through sales, the use of debt to finance business assets, the long-term cash flow potential from current operations and the small businesses ability to collect outstanding receivables owed by clients.
