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Four Basic Financial Statements Basic Financial Statements Accountants, business owners, investors, creditors and employees use four basic financial statements of
The Four Financial Statements THE FOUR FINANCIAL STATEMENTS 1. THE BALANCE SHEET (aka - The Statement of Financial Condition) 2. THE INCOME STATEMENT (aka - The
Four Basic Financial Statements Prepare a 700-1,050-word paper in which you identify the four basic financial statements. Be sure to discuss how they are interrelated
Basic Financial Statements There are four basic financial statements in the reporting process of accounting: income statement, retained earnings statement, balance
Financial Statements Financial reporting is a requirement of the U.S. Securities and Exchange Commission. The Financial Accounting Standards Board establishes the
Submitted by tomprince on February 16, 2007
Category: Business
Words: 1125 | Pages: 5
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THE FOUR FINANCIAL STATEMENTS
1. THE BALANCE SHEET (aka - The Statement of Financial Condition)
2. THE INCOME STATEMENT (aka - The Profit & Loss [P & L] Statement)
3. THE STATEMENT OF RETAINED EARNINGS (aka - The Statement of Net Worth)
4. THE CASH FLOW STATEMENT
The first concept that one must understand is that all businesses must keep records of what goes on in the business for two very distinct and separate purposes. The first set of reports, called the financial statements, is basically a history of what has happened to the company in financial terms for a specified period of time. What I sometimes like to refer to as the financial road maps of corporate information, stress the importance of the types of information that they provide us. While these reports or statements are obviously invaluable to the company's management, they are mainly used by external individuals and organizations, completely apart from the company. Such individuals and organizations might be stockholders and potential investors, the S.E.C., the I.R.S., banks or other lenders, and the company's creditors. On the flip side of this are the reports that are used predominately by the company's internal management personnel to appraise and assess the success, or lack thereof, of their actions in running the company thus far and to help them make decisions that will affect the future of the company. The information that I am referring to here is known as the financial ratios. These are also used by external analysts for many of the same purposes. In these Financial Management courses, there is an extensive discussion of both the financial statements and financial ratio analysis, because the numbers shown in the financial statements are only part of the corporate mosaic. These numbers tell a story and the only way to understand what it is all about, is to analyze each part. Part one is comprised of the four financial statements. These statements...
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