• Financial Statements
The two most important financial statements are the income statement and balance sheet. Both statements enhance management’s ability to monitor and control the organization’s financial situation by using ratio analysis. Financial statements are prepared according to generally accepted accounting principles (GAAPs), which enable investors (for-profit HSOs) and lenders to compare and understand the HSO’s financial performance.

(Read the Balance Sheets, Income Statements, and Statements of Cash Flow article for more information)
✓ Analyze Financial Documents- profit and loss (income) statement and balance sheet:
o First, collect at least two years of financial statements of your HSO
o Profit and Loss (income) statement analysis
1.
1.
1. What is the total revenue, total costs of revenue, and net income for each year?
2. What could be the reasons the numbers changed over the two years?
o
o Balance Sheet Analysis
1.
1.
1. What are the total assets, liabilities, and shareholder equity for each year?
2. What could be the reasons the numbers changed over the two years?
**The analysis of both statements should be discussed and a graph or chart can be used to reflect the differences in the two years**