In Business, it's all about the money that comes in to the business and that's why financial statements are like a company's report card. That doesn't mean that you can't give back (or that it's not extremely important) or that you can't create a business model where you never have to actually work because you love what you do. No, what that means is that for a business to stay, well, in business, it has to make money. Financial statements are what show you how the company is performing and whether it will get to keep performing.
Which statements are most important? They're all very important in their own way, but we'll list a couple here that we think you should keep on hand and review regularly.
- Income Statement (since this includes revenue, expenses, and any resulting net profit or loss)
- Balance Sheet (since this lays out the ending balances in the comapny's asset, liability, and equity accounts)
What to remember: These statements are very important, but they don't tell the whole picture. Make sure that when you go to analyze the business's financials in depth that you have enough to see the whole picture.