xacc week 1
Financial statements
Julian D. Maujer
XACC/290
November 30, 2014
University of Phoenix
Financial statements
The four simple financial statements provide a rundown of the monetary activities of a business or corporation. They can be prepared at any point in time and can apply to any time span. All four statements are needed to determine the company growth and profitably. Investor and creditors will use all four statements to determine if the company is a sound investment.
1. Balance sheet - The balance sheet reveals everything of value that the corporation owns. This includes all Assets, Liabilities, and the Net Worth. The balance sheet can be useful to an internal user such as management and employees by showing where improvement need to be made within the company. Creditors and investor will use the balance sheet to determine if money can be loaned to or invested in the company.
2. “Income Statement - The income statement shows the company’s revenues, expenses and net income during a specific period of time ("Boundless", 2014).” This statement is importing to the internal employees and investors/credits because it shows the profitability of the company.
3. “Cash Flow Statement - The cash flow statement shows the amount of monies within the company ("Boundless", 2014).” Anything that affects the cash balance is listed on this statement. This allows managers, creditors, and investors to view the company’s operations from a cash perspective.
4. Statement of Shareholders’ Equity- The statement of shareholder 's equity shows changes in the shareholder 's equity account. This reflects the owner’s interest in the corporation. This can help investors determine if this is a good company to invest in by showing if other investor are holding on to the stocks or selling the shares. If a larger number of stocks have been sold recently, it may be a good idea to look at any changes in the company business plans or if any big changes have been made recently. If
Julian D. Maujer
XACC/290
November 30, 2014
University of Phoenix
Financial statements
The four simple financial statements provide a rundown of the monetary activities of a business or corporation. They can be prepared at any point in time and can apply to any time span. All four statements are needed to determine the company growth and profitably. Investor and creditors will use all four statements to determine if the company is a sound investment.
1. Balance sheet - The balance sheet reveals everything of value that the corporation owns. This includes all Assets, Liabilities, and the Net Worth. The balance sheet can be useful to an internal user such as management and employees by showing where improvement need to be made within the company. Creditors and investor will use the balance sheet to determine if money can be loaned to or invested in the company.
2. “Income Statement - The income statement shows the company’s revenues, expenses and net income during a specific period of time ("Boundless", 2014).” This statement is importing to the internal employees and investors/credits because it shows the profitability of the company.
3. “Cash Flow Statement - The cash flow statement shows the amount of monies within the company ("Boundless", 2014).” Anything that affects the cash balance is listed on this statement. This allows managers, creditors, and investors to view the company’s operations from a cash perspective.
4. Statement of Shareholders’ Equity- The statement of shareholder 's equity shows changes in the shareholder 's equity account. This reflects the owner’s interest in the corporation. This can help investors determine if this is a good company to invest in by showing if other investor are holding on to the stocks or selling the shares. If a larger number of stocks have been sold recently, it may be a good idea to look at any changes in the company business plans or if any big changes have been made recently. If
References: Boundless. (2014). Retrieved from https://www.boundless.com/accounting/textbooks/boundless-accounting-textbook/financial-statements-overview-3/the-balance-sheet-25/uses-of-the-balance-sheet-159-6010/ Wall Street Prep. (2013). Retrieved from http://www.wallstreetprep.com/blog/how-are-the-financial-statements-linked-together/ Accounting Tools. (2014). Retrieved from http://www.accountingtools.com/income-statement-overview