Before we start talking about the Financial Statements, I want to introduce you to our new friend Net Income.

Income (Money coming IN) – Expenses (Money going OUT) = Net Income (This can be a Profit or Loss).

Net Income tells you if your business has made a profit. If you did, this number will be positive, which of course is the goal. I introduced Net Income first because it can be found on all 3 Financial Statements.

Important Note: When you pull your Financial Reports, make sure to select the dates you want to see, because your accounting software will default to a specific time frame like the previous month.

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