When evaluating the financial position of a business he or she is considering buying, an entrepreneur should examine?

There are a lot of things to consider when buying a business. But in terms of financial health, these are some of the things to consider:

1. The income statements and balance sheets from the past years (commonly 3 to 5 years) : to check how healthy the flow of cash is

2. The income tax returns for the past years (commonly 3 to 5 years) : to check if there are no discrepancies in relation to government mandate tax

3. The compensation of the owners and that of the relatives: to determine the balance or to check if there is reasonable amount of compensation