A Financial Statement can be defined as, “Summary report that shows how a firm has used the funds entrusted to it by its stockholders (shareholders) and lenders, and what is its current financial position” (Business Dictionary, 2011). The Financial information is required for various users to make an informed Decision. “The purpose of financial information is to provide inputs for decision making” (Kimmel, Weygandt, Kieso, 2009, Para 1, p. 6). There are four different parts covered in a Financial Statement; those are Balance Sheet, Income Statement, Retained Earnings Statement, and Statement of Cash flow. The assignment will elaborate the purpose of each statement and differentiate its utility for different…
A financial statement that reports the assets, liabilities, and stockholders' equity at a specific date.…
E) A financial statement that lists the types and amounts of the revenues and expenses of a business for an accounting period.…
A financial statement is a statement, or formal record, that lays out the activities of a business, person, or other entity. Quarterly or yearly financial information is put into relative categories and displayed to show how the company is matching up to expectations. For larger corporations, these statements may include large amounts of side notes and subcategories to show all the parts that the company may have connected to the larger company structure.…
Statement of Shareholders’ Equity- The statement of shareholder 's equity shows changes in the shareholder 's equity account. This reflects the owner’s interest in the corporation. This can help investors determine if this is a good company to invest in by showing if other investor are holding on to the stocks or selling the shares. If a larger number of stocks have been sold recently, it may be a good idea to look at any changes in the company business plans or if any big changes have been made recently. If…
* A balance sheet is summary of a company's financial condition at a specific point in time, including assets, liabilities and net worth. It allows the company to know what they have been paying for or what they owe out to people. An income statement is a report that tracks a company’s revenues, gross profits, operating income, and net worth. All businesses need to have revenue in order to establish a good foundation to have their business up and running. A retained earnings statement is the portion of net income not paid out to investors in the business as dividends. If the company earns a profit they have to decide whether or not to invest it or keep it as theirs and distribute it evenly throughout the others in the company. Statement of cash flows provides information about an entity's cash receipts and cash payments during a period. Cash flow statements classify cash receipts and payments according to whether they stem from operating, investing, or financing activities. Assets are any item or items of economic value owned by an individual or corporation, especially that which could be converted to cash. A liability is an obligation that legally binds an individual or company to settle a debt. Comparative statements are financial statements for different periods that allow the comparison of figures to illustrate trends in a company’s performance. Stockholder’s equity is the part of the balance sheet that represents the capital received from investors in exchange for stock donated capital and retained…
2. Financial statements are the principal means through which a company communicates its financial information to those outside it.…
Financial Statements are designed to define the health and well-being of a company. It is necessary that the information on the financial statements is accurate.…
10. The four basic financial statements are the Income Statement, Statement of Retained Earnings, Balance Sheet, and Statement of Cash Flows.…
Financial Statements – Balance Sheet, Income Statement, Statement of Cash flows, and statement of changes in stockholders’ equity.…
Statement of changes in fund balance/net worth. This statement indicates excesses of revenue over expenses and shows taxes as well.…
Beginning with the income statement, the information provided includes the amount of revenue that the company earns over a certain period of time. The period of time is usually a year or some a portion of a year. An income statement reveals the net worth or loss of a company reporting on the costs and expenses associated with the revenue earnings.…
Accountants, business owners, investors, creditors and employees use four basic financial statements of an organization to determine the financial well-being and future earnings potential of that organization. Financial statements are a key tool in seeing and understanding the past, present and future condition of an organization. What are these financial statements and what do they mean to the reader? Do the financial statements mean something completely different to an investor, creditor, and employee?…
A. Income Statement - summary of firm’s accounting revenues, expenses, and profits over some time period…
Financial statements are records that provide information of an organization or business financial status and is a measurement of the fiscal or quarterly performance of a company. They are written evidence of reporting obligations and are used for making decisions. There are different methods for examining the financial statement and balance sheet. Vertical analysis, horizontal analysis and financial ratios are part of financial statement analysis.…