Balance sheets. Income statements. Profitability ratios. These are just a few of the crucial tools to successfully understanding and managing business. Becoming comfortable with financial statements and learning how to use them to successfully analyze and navigate a company is essential to success. This introduction to financial statements will lay the ground work for that understanding and serve as a valuable reference guide over time.

Table of Contents

Part 1: The Basics of Financial Statements What Are Financial Statements and Who Uses Them? The Balance Sheet The Income Statement The Cash Flow Statement Part Summary Part 2: Understanding Ratios and Percentages Ratios: A Key Management Tool How Ratios Are Developed Ratio Types Category 1: Liquidity Ratios Category 2: Profitability Ratios Category 3: Efficiency Ratios Part Summary Part 3: How to Use Ratio Analysis Introduction to Ratio Analysis Determining Which Ratios to Use Ratio Review Chart Part Summary Part 4: How to Perform an Expense Analysis Managing Your Expenses Examining Your Expenses Breakeven Analysis Part Summary Part 5: How to Control Your Business Tools for Controlling Your Business Trend Analysis Cash Flow Forecasting Target Statements The Accounts Receivable Aging Schedule Part Summary Appendix Resources