One way to evaluate the financial effectiveness of an organization is to look at their Balance Sheet and Income Statement. The Balance Sheet provides a look at the organization's assets, liabilities, and equity at a given point in time. Anything that an organization owns that has monetary value is an asset.
Liabilities are the claims of creditors against the assets.
The assets of an organization minus its liability are equal to its equity. The Income Statement provides information about how an organization's financial picture changes over time. It shows the revenue, operating expenses, and the net profit, or loss. Revenue is the income that an organization brings in. Operating expenses are the direct costs of manufacturing the goods or providing the services and the indirect costs of supporting the venture.