Introduction The managers of organizations use financial statements to keep track of the performances by reviewing what they are currently producing and what they have produced over an extended period of time. It is vital to these decision makers to have a clear picture of where their organization currently stands and have the ability to identify trends. This data will help create the properly constructed plans to help an organization grow as they will evaluate the strengths, weaknesses, opportunities, and threats that influence the business.
Income Statement
An income statement is one of the three main financial statements that organizations uses to stay knowledgeable about their financial situation. The portion of the income statement …show more content…
An income statement reflects the company’s operations over a period of time, as a quarter or year, however the balance sheet is an actual snapshot of that particular date. (Melicher & Norton, 2014) The balance sheet hits on two areas of information. One of these areas is the assets of the business whether they are a physical asset or financial. The second is the claims of assets by the creditors and the owners. Assets equal the liabilities plus the owners’ equity in a …show more content…
This can be a month, quarter, or year; it is up to the organization that is generating the report. The statement will have the following three standard activities on it starting with operational activities, investing activities, and financial activities.
Main Statements
The three categories a business may use in an analysis of financial statements are the balance sheet, the income statement, and the statement of cash flows. The balance sheet will have the assets of the business as well as the liabilities and stockholders’ equity up to the date of the report. This report does not cover spans of time. Income statements show the operations and financial activities during a period of time. These financial activities include their gains, losses, revenues, and expenses. (Accounting Tools, n.d.) The statement of cash flow shows the changes in the revenue stream over a recorded period of time.
Conclusion
Each of these will be able to give the business a clear picture of their incoming revenue stream and give them the ability to use it to make educated decision on their future endeavors. It is important to track this information so the company knows what is working well and what needs improvement giving them more information to able to formulate clear plans with
Income Statement
An income statement is one of the three main financial statements that organizations uses to stay knowledgeable about their financial situation. The portion of the income statement …show more content…
An income statement reflects the company’s operations over a period of time, as a quarter or year, however the balance sheet is an actual snapshot of that particular date. (Melicher & Norton, 2014) The balance sheet hits on two areas of information. One of these areas is the assets of the business whether they are a physical asset or financial. The second is the claims of assets by the creditors and the owners. Assets equal the liabilities plus the owners’ equity in a …show more content…
This can be a month, quarter, or year; it is up to the organization that is generating the report. The statement will have the following three standard activities on it starting with operational activities, investing activities, and financial activities.
Main Statements
The three categories a business may use in an analysis of financial statements are the balance sheet, the income statement, and the statement of cash flows. The balance sheet will have the assets of the business as well as the liabilities and stockholders’ equity up to the date of the report. This report does not cover spans of time. Income statements show the operations and financial activities during a period of time. These financial activities include their gains, losses, revenues, and expenses. (Accounting Tools, n.d.) The statement of cash flow shows the changes in the revenue stream over a recorded period of time.
Conclusion
Each of these will be able to give the business a clear picture of their incoming revenue stream and give them the ability to use it to make educated decision on their future endeavors. It is important to track this information so the company knows what is working well and what needs improvement giving them more information to able to formulate clear plans with