Basic financial statements are essential for any small business that wants to stay on top of their finances. They provide an accurate picture of the company’s financial health and allow owners to make sound, informed decisions about their operations. These statements include a balance sheet, income statement, cash flow statement, and statement of retained earnings. A balance sheet is a snapshot of a company’s assets and liabilities at a given moment in time. An income statement tracks a company’s revenues and expenses over a set period of time. A cash flow statement shows how much money is coming into the business and how much is going out. Finally, a statement of retained earnings accounts for what is left after all profits have been distributed. With these statements, entrepreneurs can track changes in income, costs, cash flow, and equity – allowing them to adjust as needed and make more confident decisions.