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Acc 290 Week 1 Financial Statement Analysis

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Acc 290 Week 1 Financial Statement Analysis
Financial Statements Anthony Cooper ACC/290 August 24, 2013 Professor Deborah Wilson

Financial Statements 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.
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These statements are the income statement, the balance sheet, cash flow statement, and statement of owner’s equity. First, the income statement is used to express a firm’s revenues, gains, expenses, and losses. Revenue is the money earned from day to day business dealings within the company. The expenses that are located on the income statement are due to cost of operating a business. Companies balance out the equation on the income statement as follows revenues minus expenses equal net income. The income statement shows how much profit was earned by the company after all expenses have been taking out. If total expenses exceed total revenues, a net loss is reported on the income sheet. Next, the purpose of the balance sheet is to report the financial integrity of a company. The amount of assets, liabilities, and stockholders equity are thoroughly expressed on the balance sheet. Assets are economic resources that the company has at its digression. Liabilities and stockholders’ equity are streams of financing or financial claims against the

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