Financial statements are used to represent the financial position of a company at a specific point in time and the effects of operations.  There are four major financial statements used by public companies: the Balance Sheet, the Income Statement, the Cash Flow Statement, and the Statement of Retained Earnings.  A large number of users read companies’ financial statements, trying to utilize the numbers to make informed economic decisions.

If every financial transaction that ever took place was correctly recorded and every accountant, manager, or executive was completely honest and knowledgeable of the accounting principles that went into recording transactions, financial statements could be prepared and used with 100% certainty.

Running a small business comes with a host of challenges that must be addressed on a regularly basis, especially during periods of growth.  Once the success of your business necessitates additional employees, it can be difficult to determine how to handle those responsibilities with your limited resources, especially when it is not cost effective to hire a person specifically to perform payroll duties.

Profitability ratios are a class of financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.