We can assist you in the preparation of your financial statements in accordance with professional standards, but express no opinion or any other form of assurance on the underlying information included in them. The financial statements produced can be a useful tool for management for making financial decisions.
Financial statements are financial records that track and report economic activities of a business, not-for-profit, person or other entity. Financial statements are important tools for business growth and are required by law for publicly traded firms.
There are four main financial statements to be aware of. These include the:
- Income Statement: Also known as the profit and loss (P&L) statement, statement of revenue and expense, and statement of comprehensive income, the income statement shows the net profit or net loss over time. For businesses, the income statement is broken up into operating and non-operating parts. This financial statement can be used to calculate important figures like return on equity (ROE), operating profit, and gross profit over an accounting period.
- Balance Sheet: The balance sheet summarizes the assets, liabilities, and shareholders’ equity of an entity. Unlike the income statement, the balance sheet is fixed to a definitive point in time. The most important note to a balance sheet is that both sides must equal.
- Statement of Retained Earnings: This financial statement must be prepared using generally accepted accounting principles (GAAP). It can be a stand-alone financial statement or included in the income statement or balance sheet. It’s objective is to properly track all changes in retained earnings over an accounting period.
- Cash Flow Statement: This financial statement works in conjunction with the balance sheet and income statement. It records all cash and cash equivalents that come into and leave a company over an accounting period.