A balance sheet is a financial statement that provides a snapshot of a company’s assets, liabilities, and equity at a specific point in time. It shows what the business owns (assets), what it owes (liabilities), and the owner’s or shareholders' equity. For small businesses and corporations, the balance sheet is crucial because it helps assess financial health, track growth, and make informed decisions. It also provides insights into liquidity, solvency, and the company’s ability to meet its financial obligations. Additionally, balance sheets are essential for securing loans or attracting investors, as they demonstrate the company’s financial stability

A profit and loss statement (P&L) summarizes a company's revenues, costs, and expenses over a specific period, showing whether the business made a profit or incurred a loss. For small businesses and corporations, P&Ls are crucial for understanding financial performance, identifying trends, and managing costs. They help assess profitability, inform budgeting decisions, and guide strategic planning. P&Ls are also essential for tax reporting and can be used to demonstrate financial health to investors or lenders. Regularly reviewing P&L statements ensures businesses stay on track to meet financial goals.