Below are a few common reports that you should understand when in business. The most important aspect of any report is to ensure the information it is providing to an owner is relevant to their business.
Profit & Loss Statement
Also known as an Income Statement - This report summarizes the revenues, costs & operating expenses incurred during a specific period of time. This particular example relates the percentage of cost as compared to your Gross Income. Also specific to the Real Estate Industry, an Agent or Team can review over the course of time the percentage of their Listing vs. Referral vs. Sales vs. Rental Income.
It is often helpful to review your financials in different formats, as different individuals see certain information in one report that they may not see in another. The below example relates the percentage of expenses as compared to your Total Operating Expenses. The example is the same information as above, just viewing the information in a different light.
A Balance Sheet summarizes a company's assets, liabilities & owner's equity as of a specific date in time. This report gives a bank, investor or owner an idea as to what the company owns and owes. The Bottom Line or Net Income from the Profit & Loss Statement flows into the Balance Sheet.