Hey every one! What is up?

My name is Bobby and I want you guys to learn how business works. It can be terrifying but don't worry, you got me! You will feel proud of yourself after reading this book and know lots of things adults know!

Three important things to understand in business are income statements, balance sheets, and cash flow statements. With me you will be able to read them and understand them!

Get ready, on your mark, READ!!!

An income statement tells how much money your boss is loosing or making. something really simple, telling you how much your boss made, how much money it took him/ her to make money, and then the total amount they have left.

For an example, if you decide to mow lawns for extra money. Let's say you charge $20 per house, you put that down on the income statement. You then also put down the things you bought to start you business. for example your gloves, tools, etc. Suppose supplies cost you $50. You then do 5 different lawns. You have just made $50!

Moving on to the second important sheet! THE BALANCE SHEET. :) A bit harder, but don't hold back from it, you will gain more knowledge.

This sheet shows three different things, assets, liability and equity. Now did you know, that every one of your little friend including you has all these three things?

For an example, an asset is anything you own. You can own your toys, your bikes, money saved up, or all. Those are the nicest things correct? But what about when you owe someone something? That is called a liability. There are some new shoes you would like, but you don't have enough money. you ask your parents for extra money in order to buy the shoes. That money you are borrowing iis called a liability. Then there runs in equity. Equity is your assets minus liability. If your toys are worth $50, your bike is valued at $ 15, and you have saved $20, your assets equal $85. You owe your parents $35, so your total equity sums up to $55.

Don't worry, don't worry. We are almost done, I know that was a lot. I am tired too! However, we need one more thing. The income statement and the balance sheet will help you understand the cash flow statement.