Why do managers need to keep business and financial records? Keeping financial records lets a business track its overall progress. Keeping records can also help businesses find ways to cut corners and establish newer, cheaper ways to do business. By keeping records and looking at revenue, gross margin, and operating expenses, a business can see what its profit is and wether or not the business they are in is worth doing. A balance sheet is a one day look at a businesses financial condition. It can vary from day to day, but it gives a business owner an idea of what his firm is doing any given day. A Profit and Loss sheet is a record of finances over a period of time. If income exceeds expenses, then the business is making a profit over that period of time. If income is lower than expenses then the business is taking a loss. The difference between the two is how a balance sheet looks at one day and a P&L sheet looks at over a given period of time over one day. Net working capital is the difference between current assets and current liabilities as
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