Business financial statements consist of three main components:
(a) the income statement,
(b) statement of cash flows
(c) balance sheet.
The balance sheet is often the most misunderstood of these components — but also most useful if you understand how to use it for your businesses.
The balance sheet provides a snapshot of the overall financial condition of your company right now. It lists all of the company’s assets, liabilities and owner’s equity in one simple document. By subtracting liabilities from assets, you can determine your company’s net worth at any given point in time.