Have you ever wondered if there was enough money in your checking account to cover all your expenses for the month? Maybe you are proactive and want to know what items contribute to your expenses each month and how your situation would be impacted if certain items were eliminated. Perhaps you are contemplating another side hustle and would like to see a snapshot of how much more money you will need to bring in to achieve your financial goals. Whatever the situation, you probably reached for a bank statement, your budget, or created a spreadsheet to help answer your question. You chose to use a financial statement of some sort to help with your query. Businesses and investors have similar questions, however, to insure that the analysis used to conduct this research is consistent with every business, regardless of what they do, they start by using a set of agreed upon practices and documents (called financial statements) to help illustrate the health of a company and how it functions financially. These financial statements are the Balance Sheet, Income Statement, and Statement of Cash Flows.
Choose one of these statements as your preferred document to analyze the health of an enterprise and explain why you prefer it and how it is used. There is no right or wrong selection.
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