Balance sheets are fairly easy to read. They show company's condition on any given date. A good way to gauge how company is doing is by comparing balance sheets for company at different periods. This will give you a good idea of market trends your company goes through over a span of time. Be consistent, know your company and read between lines.

What can be more important than cash? There is no getting around fact that it is VERY important to track cash flow. This is one area that can make or break your business.

What is a cash flow statement, you ask? The cash flow statement explains how a company obtained and used cash during accounting period. There are inflows and outflows. Cash flows include any cash in or out generated from operating, investing and financing activities. The bottom line will tell you if you have an increase in cash or a decrease in cash. If you have a decrease, you have a problem. Using cash flow statement, you will be able to quickly analyze what needs to be done to make swift corrections.

Your financial professional can assist you with your financial reporting. Make sure you get a thorough explanation from them as too what needs to be done. You hire them to advise you and not just hand you meaningless reports. After all, if you don't know what you are reading, they may as well be meaningless. You need to know exactly what big picture means and what bottom line is costing you.

In any case, you should be reviewing all your financial statements often in order to make quick adjustments. This will allow you to ultimately be more profitable and productive, after all isn't that what you are in business to do, make money, not loss it.

Where can you get these statements? From your accountant or reports can be generated from your accounting software. Remember no one report can give you everything you need. It is important to look at your income statement, balance sheet and cash flow statement on a regular basis. Always use your best judgment when making decisions based on financial reports.