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It is regrettable that the balance sheet and the P & L statement are often held in some sort of mystery for both are logical and readable document. For those not familiar with such document copies of annual reports are issued by companies for their share holders and are often available form share brokers, insurance offices or investment organizations. A good source of such data is your won bank for the annual report is normally a document the manager is pleased to offer his client and it can be a sign of credible interest in his bank. You likely gain respect by asking for the information and after all the banker may be asked to rate your enterprise so you should be entitled to rate his.

Financial should be recognized as tools and employed to construct and develop a business. And they are only part of a business plan, but only a part. When used in business operations financials can be a shortcut to the information needed to make decisions. It is essential to remember two things about financials:

1. Data found in balance sheets and P & L statement is history; simply the compilation of what has already happened, not what is happening at the exact moment you absorb the information. The well founded comment that we should learn where to go from studying where we have been is appropriate to the interpretation of financial documents. They are examples of past performances and are usually prepared by specialist in business histories, not business futures.
2. The financial forecast is as good as the data and expertise used to make it. Competent and reliable forecasting is based on research; research is based on reviewing and interpreting history as well as correlating data that may be applicable to new strategies.