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Important Financial Reports to have in Any Organization

Leadership Essentials


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Unit Video

Unit Summary

The 3 most Important Financial Statements are:
  • Balance Sheet
  • Profit or Loss Statement – P&L
  • Cash Flow statement

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In this video, you will learn about the most important financial statements in any organization.
Financial statements help to manage your business by showing you where the money came from, where it went and where is it now, allowing you in turn to ensure that you have a healthy business.
The three most Important Financial Statements are:
  1. The Balance Sheet which highlights the assets – what you own, liabilities – what you owe, and capital – what is owed to owners. Assets = liabilities + capital
  2. The Profit or Loss Statement – P&L for short – also called Income statement includes how much sales or revenue youmade over the year less the expenses
  3. The Cash Flow statement includes in the Inflows and outflows of cash in the company. This document is updated on a monthly basis since you always need to ensure you have enough cash to pay for your expenses
As the saying says – cash is king!

Beware of little expenses. A small leak will sink a great ship. Benjamin Franklin