Financial Statements

Aalia Ameen

FINC615-1204B-04: Applied Managerial Finance  

Dr. Geoffrey VanderPal

November 20, 2012

Introduction

• Financial Statement Defined• Four Main Types of Financial Statements• How Data is Collected for Financial

Statements• What Can be Measured by Financial

Statements.• Furniture Industry Financials

Financial Statements

A financial statement is a written report which describes the financial health of the

company and or business.

Four Main Types of Financial Statements Include:

• Balance Sheets• Income Statements• Cash Flow Statements • Statement of Shareholders Equity

Balance Sheets

• Balance Sheets provide information as to what a company owns and what it owes at a fixed point in time.

• The Balance Sheet demonstrates the financial health of the company from the first day to the end day listed on the sheet.

• A balance sheet is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time.

Income Statements

• The income statement provides information as to how much money a company has made and spent over a period of time.

• The income statement is a direct result of the information that is computed and or recorded and then transformed into concise compiled revenue and expense figures (Atkinson A., Kaplan R., Matsumura E., & Young 2007).

• It is usually prepared directly from the monthly closing of the books and provides an accurate picture of the revenue and expense of the business for a certain period of time.

• The traditional income statement summarizes a company’s revenues and expenses quarterly and annually for its fiscal year.

Cash Flow Statements

• A cash flow statement presents information about the cash flows associated with the company’s main operations and those associated with its investing and financing activities of the period.

• A cash flow statement functions in conjunction with both the income statement or performance dimension and the balance sheet or financial position.

Statement of Shareholders Equity

Data Collection

What Can be Measured by Financial Statements?

References

Atkinson A., Kaplan R., Matsumura E., & Young (2007). Management accounting (5th ed) New Jersey: Pearson-Prentice Hall.

Edmonds, C., Edmonds, T., McNair, J., & Frances M., (2003). Fundamental financial accounting concepts. New York: McGraw-Hill.

Investopedia (2011). Balance sheet and income statement. Retrieved from website http://www.investopedia.com/terms/b/balancesheet.asp#ixzz1rlax5OSx

References

U.S Securities and Exchange Commission (2007). Income statement. Retrieved from http://www.sec.gov/investor/pubs/begfinstmtguide.htm

Walton, P. (2005) Cash flow statements. Retrieved from website www.cengage.co.uk/walton_aerts/students/Powerpoints/ch10.p