3

Financial Statements

Introduction

One of the most important competencies of an entrepreneur is understanding the financial statements of her own enterprise. Therefore, the discussion in this chapter is intended as an overview of the main relevant issues concerning key financial statements. The objective is to teach the purpose of the different statements, their components, and their significance to entrepreneurs who are not financial managers. This is the final step toward making financial statement analysis, which will be the focus of the next chapter, simple and user-friendly.

Financial statements are important because they provide valuable information that is always used by business managers and investors. However, it is not necessary for ...

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