Glossary · Reading the business
Annual financial statement
In short
This is a formal summary of a business's financial performance and position over a fiscal year, usually including a Profit and Loss Statement and a Balance Sheet. You care because these are critical documents for understanding the business's historical profitability and financial health.
What it means in a deal
You'll review several years of annual financial statements during due diligence to analyze revenue trends, operating expenses, and asset/liability structure. Always compare these statements to tax returns and bank statements to verify accuracy and identify discrepancies.
Related terms
Common questions about Annual financial statement
- What if my personal financial statement shows low liquid assets?
- How important is my personal financial statement for an SBA 7(a) loan application?
- What is a 'personal financial statement' and why is it needed for an SBA 7(a) loan?
- What does a 'personal financial statement' entail and why is it needed for an SBA 7(a) loan?
- When is a personal financial statement (SBA Form 413) required for non-owner guarantors of a 7(a) loan?
- What if my personal financial statement shows low liquidity, but I have a strong credit score and business plan?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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