Leranit

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Index
Title| Page No.|
Introduction| 2|
Financial statements| 3|
types of financial statement| 4|
relationship between financial statement| 5|
financial statement in practice| 6|
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Introduction
Financial Statement
In the name of Allah most gracious most merciful. In this essay I will take about financial statement. Trying to write everything I knew about it, starting with the types of financial statement, relationship between financial statement and financial statement in practice. I will use a KSA company as an example of the financial statement broses and how it effects the company progress. Hoping in writing a useful sheets for those who study or interesting in this failed.

Financial statements :
Financial statements are records that provide an indication of an individual’s, organization’s, or business’ financial status. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis. There are four basic types of financial statements: balance sheets, income statements, cash-flow statements, and statements of retained earnings. Typically, financial statements are used in relation to business endeavors. Financial statement analysis:

Without analyzing financial data from your small business firm, you, as the owner, would be flying blind. Even if the financial end of things is not your favorite part of your business and you intend to outsource as much of it as possible, you still have to understand it. Why? Because you have to understand the output you receive from your accountant or other financial professional in order to operate your business. For example, if your accountant tells you that your profit is $1,000 for the year, you must understand what went into allowing you to make that $1,000. You may not have to know as many details as the accountant, but you certainly have to understand the big picture.

Types of financial statement:
1- Balance sheet financial statements are used to provide insight into a company’s assets and debts at a particular point in time. Information about the company’s shareholder equity is included as well. Typically, a company lists its assets on the left side of the balance sheet and its debts and liabilities on the right. Sometimes, however, a balance sheet has assets listed at the top, debts in the middle, and shareholders’ equity at the bottom. 2- Income financial statements present information concerning the revenue earned by a company in a specified time period. Income statements also show the company’s expenses in attaining the income and shareholder earnings per share. At the bottom of the income statement, a total of the amount earned or lost is included. Often, income statements provide a record of revenue over a year’s time. 3- Cash-flow financial statements provide a look at the movement of cash in and out of a company. These financial statements include information from operating, investing, and financing activities. The cash-flow statement can be important in determining whether or not a company has enough cash to pay its bills, handle expenses, and acquire assets. At the bottom of a cash-flow statement, the net cash increase or decrease can be found. 4- Statements of retained earnings show changes in a company's or organization’s retained earnings over a specific period of time. These statements show the beginning and final balance of retained earnings, as well as any adjustments to the balance that occur during the reporting period. This information is sometimes included as part of the balance sheet, or it...
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