Most SME owners understand their profit and loss account and balance sheet, but the Statement of Changes in Equity often goes unread. It reconciles exactly why shareholders' funds moved — through profit, dividends, share issues, or revaluations — and misunderstanding it can lead to illegal dividends, bad lending decisions, or a false sense of business health.
Understanding financial statements is crucial for anyone learning accounting or managing a business. Among these statements, the balance sheet holds a special…
