When considering buying a business, it is crucial to assess its financial performance and determine if it is making money. Here are some steps to help you evaluate a business's profitability:

1. Analyze Income Statements: Income statements provide a snapshot of a company's revenues, expenses, and profits over a specific period. They showcase the business's ability to generate profit from its operations. Look for consistent revenue growth, healthy profit margins, and positive net income.

2. Examine Cash Flow Statements: Cash flow statements reveal the inflow and outflow of cash in a business. Positive cash flow indicates that the company has enough funds to cover expenses and invest in growth. Negative cash flow may suggest financial difficulties.

3. Review Balance Sheets: Balance sheets provide an overview of a company's assets, liabilities, and equity at a given point in time. Assessing the business's financial health through its assets and liabilities can help determine profitability.

4. Compare Industry Benchmarks: Research industry benchmarks to understand how the business performs relative to its competitors. This can give you an idea of whether the business is profitable compared to similar companies in the industry.

5. Conduct Due Diligence: Request detailed financial records and statements from the business owner. Analyze the information provided, including sales records, tax returns, bank statements, and audited financial statements. This helps verify the accuracy of the financial information provided by the business.

6. Seek Professional Help: Engaging an accountant or financial advisor experienced in business acquisitions can provide valuable insights and help you interpret financial statements accurately.

If a business is unwilling to disclose financial information, it raises concerns about transparency. In such cases, you can consider alternative methods to assess profitability:

a. Look for Indirect Indicators: Reviewing the business's market reputation, customer reviews, and industry presence can provide some insights into its profitability. However, this method is less reliable and may not give a complete picture.

b. Assess Tangible Assets: Evaluate the value of physical assets such as property, equipment, or inventory. While this doesn't directly indicate profitability, it can contribute to the overall value of the business.

c. Use Multiples or Valuation Methods: Apply industry-specific valuation methods or multiples to estimate the business's potential profitability. However, these methods are less accurate than analyzing financial statements.

Remember, it is essential to exercise caution when evaluating a business's profitability. Seek professional advice and thoroughly research the industry and market conditions.