Understanding Financial Statements

Put yourself in the place of the woman in Figure 12.4 "What Connie Wants to Know". She runs Connie's Confections out of her home. She loves what she does, and she feels that she's doing pretty well. In fact, she has an opportunity to take over a nearby store at very reasonable rent, and she can expand by getting a modest bank loan and investing some more of her own money. So it's decision time for Connie: She knows that the survival rate for start-ups isn't very good, and before taking the next step, she'd like to get a better idea of whether she's actually doing well enough to justify the risk. As you can see, she has several pertinent questions. We aren't privy to Connie's finances, but we can tell her how basic financial statements will give her some answers.

Figure 12.4 What Connie Wants to Know