Financial Statement Review

Good Essays
Financial Statement Review
University of Phoenix
ACC/561

Financial Statement Review
Introduction
Financial statements play a significant role in each and every type of business. The financial statements provide a wealth of information to auditors, creditors, investors, suppliers and other important venues that need access to this type of information. This paper will discuss four different types of financial statements and how they are utilized by vendors, creditors and others. The four financial statements that will be reviewed are the income statement, balance sheet, cash flow statements and statement of retained earnings.
Income Statement 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.
Balance Sheet The balance sheet is a snapshot which examines the business. This statement records assets, liabilities and the equity of a company at a particular point in time. The equation used for the balance sheet is assets = liabilities + shareholders\equity. Assets are those things that the company actually owns or controls. The liabilities are represented by the debt or financing that was taken out to acquire those assets. Equity is that money that has been provided by people or stockholders to keep the business afloat.
Statement of Cash Flows The statement of cash flows statements reports over a period of time and covers cash inflows and outflows. Generally the statement of cash flows refers to the day to day operations or operating cash flows, cash from investing and cash from financing. It is difficult for a company to manipulate the cash flow and therefore is a very important financial statement.
Statement of Retained Earnings The



References: Kimmel, Paul D. (2009) Accounting: Tools for Business Decision Making (3rd ed). John Wiley & Sons, Inc.

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Material Financial Statement Review What is the net income for the current fiscal year? Is it up or down from the prior year? Why would this information be important to investors? For FY15 the total consolidated income for Walmart is $17,099 million. In FY14 Walmart recorded a loss from FY13, but is showing an increase with $16,695 million in FY14 to FY15. Page 38 of the Annual Financial Report shows these figures along with many other figures. Investors look at the Annual Financial Report to…

    • 437 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Resource: Appendix A Review the financial statements in Appendix D. Calculate the following: Current ratio, long-term solvency ratio, contribution ratio, programs and expense ratio, general and management and expense ratio, fund-raising and expense ratio, and revenue and expense ratio for the years 2003 and 2004. Include the current ratio, long-term solvency ratio, contribution ratio, programs and expense ratio, general and management and expense ratio, fund-raising and expense ratio…

    • 274 Words
    • 2 Pages
    Satisfactory Essays
  • Best Essays

    Financial statements are essential accounting tools which include balance sheets, cash flow statements, and income statements that provide information on a company 's past and present financial history. Information on financial statements can be used by any number of public and private entities to determine if an organization 's financial status is healthy. Burger King and McDonald 's are two organizations that use financial statements in conducting business. Further, this paper will discuss the…

    • 1840 Words
    • 6 Pages
    Best Essays
  • Powerful Essays

    Review of Financial Statements Paper The following financial comparison of two publicly traded companies, Whole Foods Market Inc. and Target Corporation, will enhance the understanding of the proposal presented for a possible corporate acquisition presented to our company. This presentation will present the possible acquisition of Whole Foods Market Inc. by Target, Inc. Both companies are industry based organizations. Whole Foods Market Inc. brings financial strength to an already financially stable…

    • 1359 Words
    • 6 Pages
    Powerful Essays
  • Good Essays

    University of Phoenix Material- Financial Statement Review of WalMart 2014 What is the net income for the current fiscal year? Is it up or down from the prior year? Why would this information be important to investors? The net income of the company for the current fiscal year is $26,872 million. This year net income has decreased from last year (2013) net income of $27,725 million. The continuous increase in prior years shows the profitability in WalMart. The trend of increase in net income…

    • 543 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Patton-Fuller Financial Statement Review Marlyn Aguirre Kristy Borowicz Carrie "Shellie" Cobbs Jessica Wilson Health Care Financial Accounting HCS 405 Robert Hammer November 05, 2013 Patton-Fuller Financial Statement Review Understanding how finance affects business is essential to the success and longevity of the business. How a business earns its income, raises money, and how a business pays its bills and invests in the businesses future affects the financial growth of the company. The process…

    • 955 Words
    • 4 Pages
    Better Essays
  • Satisfactory Essays

    University of Phoenix Material Financial Statement Review What is the net income for the current fiscal year? Is it up or down from the prior year? Why would this information be important to investors? The total consolidated net income for Fiscal Year 2015 is $17,099 million dollars. This is amount is up from the previous Fiscal Year (2014) which had a consolidated net income of $16,695 million dollars. This information can be found on page 38 of the Walmart 2015 Annual Report. This information…

    • 341 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    law to prepare and provide financial statements for each accounting period. This has been the case since the conception of ‘The Companies Act 1948' (Flint, 1982), last amended in 1985. Although it's been over 55 years of reporting entities preparing financial statements, the objective of these statements has always been a matter of discussion. The Accounting Standards Board (ASB) came up with a precise outline in 1999 which stated "The objective of financial statements is to provide information about…

    • 2718 Words
    • 11 Pages
    Powerful Essays
  • Good Essays

    analysis is one of the techniques of financial analysis to evaluate the financial condition and performance of a business concern. Simply, ratio means the comparison of one figure to other relevant figure or figures. According to Myers , “Ratio analysis of financial statements is a study of relationship among various financial factors in a business as disclosed by a single set of statements and a study of trend of these factors as shown in a series of statements." Advantages and Uses of Ratio Analysis…

    • 678 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Financial Statement

    • 609 Words
    • 3 Pages

    Financial Statements XACC/290 January 12, 2014 Melissa Drayton Financial Statements There are four basic financial statements: balance sheet, income statement, retained earnings statement, and statement of cash flows. These financial statements would include an overview of the assets, liabilities, expenses, and revenues of the business. Financial statements are useful not only to internal user; such as managers and employees, but also to external users; such as investors and creditors to…

    • 609 Words
    • 3 Pages
    Good Essays