Another important financial report for business owners is the Statement of Shareholders’ Equity, also known as the Statement of Retained Earnings or Equity Statement.
It shows the amount of equity the owners have in the business at the beginning and end of the accounting period, including any additions or deductions.
This statement becomes useful if you plan to expand your business. The greater the amount of equity you have, the more likely you will receive a business loan.
Also, if you want to sell your business, the shareholders’ equity establishes a baseline for the asking price.