Understanding financial statements is essential to the success of a small business. Financial statements can be used as a roadmap on your business journey to economic success. Using numbers as navigation aids can steer you in the right direction and help you avoid costly breakdowns. Most business owners don't realize that financial statements have a value that goes far beyond their use to prepare tax returns or loan applications.

Following is information on the primary financial statements: the balance sheet and the income statement.
Balance Sheet
Income Statement