As a small business owner, I may turn to either balance sheet or profit and loss statement to understand how my business is doing financially. Whereas my profit and loss statement can quickly show my expenses versus my income, it doesn't specify my current assets and pending liabilities like a balance sheet does. While many other financial reports simply show my transactions that have already occurred, a balance sheet gives me an idea of things that need to occur soon. If I've just made a huge sale, my profit and loss statement may show my "business health" as great, whereas your balance sheet would also show the huge bill I owe a vendor within the next 30 days. It is a more accurate picture of my business's status.