Yearly financial statements are requirement for all corporations in order to file the GIFI section of the T2 Corporate Income Tax Return. Proper financial statements are not technically required for sole proprietorships however they are an often overlooked business tool. The balance sheet is a snap shot of what the company owns (assets) versus what the company (owes) at its year-end date. The income statement is a time based report showing the profit or loss for a particular period in time. The detailed information contained in your financial statements are an important tool for management, lenders and potential purchasers of the business.