All business organisations prepare Profit and Loss Account. It gives a summary of the income and expenses for a specified period. They also prepare a Balance Sheet, which shows the financial position of the organisation at the end of the specified period. Financial statements are used to control the organisation. The figures for the current year can be compared with the previous year's figures. They can also be compared with the figures of other similar organisations. Ratio analysis can be used to find out and analyse the financial statements. Ratio analysis helps to understand the profitability, liquidity, and solvency position of the business.

Here's what Jim Blasingame, an American small business expert and radio talk-show host, has to say:

WHAT DO YOU THINK?

Let me know in the comments section.

In this ongoing series #GreatMinds on my blog, I am shining a spotlight on the important ideas that some very successful people keep talking about in their public life.