Question

1) Why is your personal Net Worth important to know?

2) Why should a business owner understand their Net Worth?

3) Why is your personal Income Statement important to know?

4) Why is a business' Income Statement important to an investor?

Answer 1

1. Personal net worth is important to know as it provides you with information about what you have created till now. It also helps in asking for loan.

2. Business owner requires funds from outside therefore they need to know what is their net worth.

3. Personal income statememt show the income and expenditure during the period. Excess of income over expense is always a ideal situation.

4. Investors is always interested about the profitability of the company which is shown by the business income statement.