financial statements paper
Financial Statements Paper
There are for basic financial statements in accounting. Each one of these statements has their one nook within a company either negative or positive. The four are; the balance sheet, the income statement, the statement of retained earnings, and the statement of cash flows. I will discuss the how each is useful to both external and internal users. In the conclusion of this paper you will also understand the importance of each of these as well. The first financial statement I will talk about is the balance sheet. The balance sheet has three elements the assets, the liabilities, and the stock holder’s equity. This financial statement discusses what the company has invested through the three elements listed above. This type of statement will show the managers and employees what the weak and strong points of the company are and what to work on to better themselves. The external use of this type of statement will show investors and creditors how much of a risk they will have in crediting or investing into the company. The income statement is next on the chopping block. The income statement describes exactly what it is. This is a statement that shows the net income of the company minus the expenses. The only element of this financial statement is its revenues. The most important aspect of this type of statement is the fact that it shows the net profits of the company. This is very important to the managers and employees because this shows what is working to increase profits and what is hurting them. This will also show the amount of available money for them. With the external aspect the investors and creditors will see the success or failure of the company and this will sway their decision to help or not to help. The statement of retained earnings can be difficult to understand at first. The statement of retained earnings is the retained profits of the company. This is the amount of money
There are for basic financial statements in accounting. Each one of these statements has their one nook within a company either negative or positive. The four are; the balance sheet, the income statement, the statement of retained earnings, and the statement of cash flows. I will discuss the how each is useful to both external and internal users. In the conclusion of this paper you will also understand the importance of each of these as well. The first financial statement I will talk about is the balance sheet. The balance sheet has three elements the assets, the liabilities, and the stock holder’s equity. This financial statement discusses what the company has invested through the three elements listed above. This type of statement will show the managers and employees what the weak and strong points of the company are and what to work on to better themselves. The external use of this type of statement will show investors and creditors how much of a risk they will have in crediting or investing into the company. The income statement is next on the chopping block. The income statement describes exactly what it is. This is a statement that shows the net income of the company minus the expenses. The only element of this financial statement is its revenues. The most important aspect of this type of statement is the fact that it shows the net profits of the company. This is very important to the managers and employees because this shows what is working to increase profits and what is hurting them. This will also show the amount of available money for them. With the external aspect the investors and creditors will see the success or failure of the company and this will sway their decision to help or not to help. The statement of retained earnings can be difficult to understand at first. The statement of retained earnings is the retained profits of the company. This is the amount of money