Understanding Business through Financial Statements 1

Jablonsky & Basrsky in 2001 recognized the fact that for managers to appreciate commerce, they should first study the balance sheet and income statement of a company. This is because therein are the markers that clearly reveal how the company financially performed within a period. For example, the balance sheet contains the accurate record of annual assets, liabilities, and shareholders equity of a company written in the final fraction of a period. The assets are actually the monetary capital which is under the regulatory influence of the company. On the other hand, the liabilities correspond to the amount due to be paid to creditors and the dividends for shareholders’ equity as owners of the company assets.