The Income Statement, Balance Sheet and Owner’s Equity are three of the most important financial statements in any business. The Income Statement tracks income and expenses to enable you to measure how efficiently your business is earning money. The Balance Sheet records assets, liabilities and owner’s equity; it allows you to assess the overall financial health of your business. Finally, Owner’s Equity shows the owners’ investment in the company and their entitlement to profits or losses. Together, these crucial documents form a complete picture of the financial condition of your business at any given time.