types of financial statements pdf


What are the four main types of financial statements?

They show you where a company’s money came from, where it went, and where it is now. There are four main financial statements. They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity. Balance sheets show what a company owns and what it owes at a fixed point in time.

How can financial statements be used to improve business performance?

The financial statements of the business or an organization helps in sharing the financial position of the business to the creditors, investors, and analysts. They then shortlist broad attributes drawn from the financial statements and thereby derive meaningful inferences. Such inferences would then result in actions as planned by the stakeholders.

What is the purpose of a financial statement?

Financial statements are written records that convey the business activities and the financial performance of an entity. The balance sheet provides an overview of assets, liabilities, and shareholders' equity as a snapshot in time. The income statement primarily focuses on a company’s revenues and expenses during a particular period.

What is an income statement?

An income statement (or profit and loss statement) that summarizes the results of business operations for a given period. A statement of cash flows that summarizes an entity’s operating, financing and investing activities over a period of time. Cash is the most liquid asset of an entity and thus is important for short-term solvency of the company.

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