FINANCIAL STATEMENTS

Financial Statements

Financial Statements

Financial Statements

Financial statement are the formal record updated by the company, entity or the business person in order to manage the financial take and made proper decision based on these records.

Basics of Financial statement

Balance Sheet

The purpose of the Balance Sheet is to show the financial position of a company or business to a certain date. All companies are preparing a year-end balance and most of them preparing for the end of each month. The balance sheet includes a list of assets, liabilities and equity of a business. The date of the balance sheet is very important because the financial position of a business can change quickly.

Depending on your level of analysis, the balance can be classified into analytical and condensate. In general, one can say that the analytic form detailing the items that are certain groups in the condensed balance sheet shows the concepts in general groups, for example, the total investment in land, plant or equipment.

Income Statement

The Profit and Loss State or State of the result set is an accounting document that shows detailed and orderly the profit or loss for the year.

The state of gains and losses as shown in detail has earned income for the year while the balance sheet only shows the utility, but not the way it has obtained, reason why the income statement as a state is considered complementary Balance Sheet.

To facilitate the study of the rule of profit and loss or income statement, we must know each of the accounts that are part of the state, since without such knowledge will have more difficulty in the formation.

The first part is to analyze all the elements involved in the sale of merchandise to determine the gain or loss of sales, or the difference between the cost price and selling of goods sold.

The second part is a detailed analysis of operating expenses, as well as expenses and products that do not correspond to the main business activity and to determine the net value must be subtracted from gross profit, for profit or loss for the year.

Cash Flow Statement

The basic purpose of this statement is to provide information about cash receipts and cash payments from a company during the accounting period. The term "cash flow" describes cash receipts (inflows), as well as cash payments (outflows).

For a business to survive in the long run, should generate a positive net cash flow, from its ...