Financial Statements
The financial statements typically consist of the following documents:
Income Statement (Profit and Loss Statement): This document provides a summary of the company's revenues, expenses, and profits or losses over a specific period, such as a quarter or a fiscal year. It shows the company's ability to generate profits from its core operations.
Balance Sheet: The balance sheet presents the company's financial position at a specific point in time, usually the end of the reporting period. It lists the company's assets, liabilities, and shareholders' equity. The balance sheet provides insights into the company's liquidity, solvency, and overall financial health.
Cash Flow Statement: The cash flow statement reports the cash inflows and outflows from operating, investing, and financing activities during the reporting period. It helps investors and analysts understand how the company generates and uses cash, providing insights into its ability to meet financial obligations, invest in growth opportunities, and return capital to shareholders.
Statement of Stockholders' Equity: Also known as the statement of changes in equity, this document shows changes in the company's equity accounts over the reporting period. It typically includes details on changes in common stock, preferred stock, retained earnings, and any other comprehensive income. This statement helps investors track how the company's equity position has changed due to various transactions, such as issuing new shares, paying dividends, or generating profits.
In addition to these primary financial statements, public companies may also include supplementary information or notes to the financial statements, which provide further details and explanations regarding specific items, accounting policies, and significant events impacting the financial results. These notes help enhance the transparency and understandability of the financial statements for investors and other stakeholders.
Last MaintainedFebruary 2024