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What is the comparison of a financial statement of a single-owner business with a business of...

What is the comparison of a financial statement of a single-owner business with a business of buying and selling merchandise?

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Single owner business model is one where one person owns the company while merchandise business is normally owned in partnership because of the capital requirement and the amount of business activity involved. The difference between the financial statement between a single owner business and buy sell merchandise business can be in the way they are financed; it can be in their current asset and current liability structure and it can also be in fixed capital investment on machinery and other investment. Normally, the inventory carried by single owners’ business is very low but merchandise business carries a lot of inventory. These businesses sometimes keep inventory for more than one business cycle. There is significant amount of dealing in credit by these merchandise businesses but very little credit business is done by single business owner. The capital structure of single business owner mainly consists of equity contributed by him but for merchandise business, a significant amount of debt in on the balance sheet. Sole business owners also do not invest in large capital investment but merchandise firm does invest. They have to have a warehouse or machinery for manufacturing purpose.

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