Financial Statement
Question below
Financial statements consist of three separate but interrelated reports: the balance sheet, the income statement and the statement of cash flows. These statements are required by law for all publicly traded companies and are usually available in in each of their quarterly and annual reports–this includes the company your team is presenting since it is a publicly traded corporation. These aforementioned statements are vital management (information) tools and these same reports help current and potential investors make decisions about purchasing company stock and/or bonds. Before giving your presentations, you should become familiar with your company’s most recent annual and quarterly financial statements. To complete assignment #4, answer the following questions:
- What is a balance sheet and why is it an important financial statement. Why is it called a balance sheet?
- Explain the significance of the income statement of a business. How is the income statement connected to the balance sheet?
- Explain the Statement of Cash Flows and how it is connected to the Balance Sheet.
Answer preview
A balance sheet is a financial statement which lists the assets of an enterprise, its liabilities and how the business is financed- its capital. This statement is produced at a particular point in time, at least once in a year, and it gives values on each item providing details to the balance of cash in and cash out over the anteceding financial season. A balance sheet is a necessary document for business owners (www.sage.com). It provides information that they together with their accountants require…
400 words