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Accounting plays an important role in helping you assess the health, or financial strength, of your business. Financial reports serve both internal and external users and focus on the financial activities of both individual departments and the company as a whole. They are used to make departmental decisions, monitor projects, set performance goals, and plan future activities.

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Following what you’ve written so far, answer the following question as it relates to your personal business venture:

How does an income statement help you keep track of the health of your business? And what about the balance sheet?

What strategies might you employ to reduce expenditures?

Do you see any obvious ways to increase profits?

Use what you have learned on cost analysis to answer these questions in narrative form. Again, your response to the above questions should be between a total of 400-600 words. You will be graded on accuracy of content/concepts used, feasibility, and finally the organization and presentation of the writing. Please refer to the rubric posted on Canvas for more detail on grading.

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