What financial statements should I review before buying a business?

One of the first steps in evaluating a business is understanding its financial performance over time. Buyers commonly review profit and loss statements, balance sheets, tax returns, cash flow information, accounts receivable, accounts payable, and other supporting financial records to better understand how the business operates.

Rather than focusing on a single year’s results, it’s often helpful to identify trends, consistency, and areas that deserve additional discussion during due diligence.

Understanding the financial story behind the business is just as important as understanding the products or services it provides.