The Importance of Financial Statement Literacy and Analysis with Emphasis on Liquidity Issues for Small Business Owners
Fry, Jeffrey A.
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The author describes his internship with the L. Lee Stryker Center at Kalamazoo College. There are three programs located at the Stryker Center to promote its mission: Enrichment Programs, Consulting Solutions, and the Small Business Development Center. The second section discusses the importance of financial statement literacy with an emphasis on liquidity to small business owners. This research component is comprised of a summary of the cash flow statement, income statement, balance sheet, and an explanation of some of the common tools of financial analysis. To illustrate how all of these aspects of analysis function, there is research with case studies from two businesses financial statements to illustrate the importance of liquidity as well as the ways that financial statements differ between companies (a retail company and a service company).