least 2 academic sources outside B u s i n e s s F i n a n c e

least 2 academic sources outside B u s i n e s s F i n a n c e

What type of insight does each of the following statements offer the entrepreneur?

Balance Sheet

Income Statements

Statement of Cash Flow

Support your response with at least 2 academic sources outside the required materials for the course.

Read your classmates’ messages and post at least one reply by the end of the week.


As a snapshot in time, the balance sheet provides an eagle-eye view of the company’s assets, liabilities, and stockholders’ equity. A balance sheet is the sole financial statement that allows an entrepreneur to assess the company’s financial situation and health. A study of a company’s balance sheet can assist a business in determining how to continue operations in the future. A balance sheet can show how well a company is using its assets and managing its liabilities in order to maximize earnings.

The Income Statement –

An entrepreneur can use an income statement to get a snapshot of revenues, expenses, net income, and earnings per share. An income statement can also express the profitability of a company’s operations as well as its financial results. When comparing sales or revenue across various periods, an entrepreneur needs to look at the income statement to see if they are increasing or decreasing. Income statements can also help an entrepreneur decide whether or not to invest by revealing how well a company’s management is controlling spending and determining whether or not a company’s attempts to lower the cost of sales will result in increased profits over time.
The Statement of Cash Flows –

The cash flow statement can assist an entrepreneur in determining how well a business earns cash to pay debts, finance operations, and fund investments. This document serves as a supplement to the balance sheet and income statement. If an entrepreneur wants to invest, cash flow statements can reveal information like how a company’s operations are working, where the money comes from, and how money is spent. The Cash Flow Statement also indicates whether or not a company is financially sound.

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