The two most important financials statements are federal tax returns; income and expense statements.Why do think these are the two most important statements?

Reply to the following using at least 175 words. Be professional and constructive. use FULL APA references and in-text citations.

1. By analyzing financial statements (either using horizontal or vertical analysis), a person can assess his or her financial condition and progress. The two most important financials statements are federal tax returns; income and expense statements.Why do think these are the two most important statements?

2. A balance sheet reflects one’s net worth.

Net Worth is essential to show the current financial status of an individual’s or a business’s surplus or deficit.

Assets (net worth statement) – Liabilities (net worth statement) = Net Worth

Recommendation: Should increase with age until retirement

Example: $67, 502 (assets) – $43,459 (liabilities) = $24,043 Net Worth (surplus)

Example: $245,050 (assets) – $306,432 (liabilities) = (-$61,382) Net Worth (deficit)

Thoughts? Do you agree this is essential? explaiN

The two most important financials statements are federal tax returns; income and expense statements.Why do think these are the two most important statements?