Counselors to America's Small Business
Understanding Financial Statements

Accounting and Financial Statements are among the most difficult issues for small business entrepreneurs to understand.  We strongly recommend that you seek the advice of a SCORE Management Counselor.  You should also attend any of our workshops that include a discussion or accounting and/or financial statements.

The financial statements commonly used in business are the:  Balance Sheet, Income Statement (also referred to as a Profit & Loss Statement) and a Cash Flow Statement.  In addition, a Funds Flow Statement is often used in lieu of the Cash Flow Statement because it is a bit easier to understand.

You can gain a preliminary understanding of these statements by downloading examples from the Download Useful Spreadsheets section of this website.

Keep in mind that any application for bank of SBA-guaranteed financing will require current and projected financial statements, in addition to your own Personal Financial Statement.  More importantly, however, is that understanding financial statements is absolutely essential to effectively manage your small business!