Financial Reports
David Senk & Stefi Micevic
Purpose:
- Outline the financial activities of a company
- Have to follow the GAAP
- Show whether the company is doing well or not
Parts:
Income Statement
Financial Performance of Company
Revenue
Expenses
Net Income
- Name of Company
- "Income Statement"
- "For the month Ending _____"
Revenue
- Money company made
Expenses
- Money company used
Net Income
- Net loss or Net gain
Comes from the 6 Column Worksheet
Statement of Change in Owner's Equity
Shows changes in owner's equity over a time period
Beginning capital
Increases in capital
Decreases in capital
Ending capital
Heading
- company name
- "Statement of Change in Owner's Equity"
- "For the Month ending ______"
Beginning capital
- shows amount of capital at beginning of reporting period
- new company = no balance here
- company with starting capital = starting balance here
Increases in capital
- shows increase of owner's capital over reporting period'
- investments by the owner of the company
Decreases in capital
- shows decrease of owner's capital over the reporting period
- withdrawals made by the owner of the company
Ending capital
- shows the total amount of capital that the owner has at the end of the reporting period period
- found by subtracting decreases in capital from total increase in capital
Balance Sheet
What the Company Owns, owes, and is worth
Heading
- Name of Company
- "Balance Sheet"
- Once specific date
Assets
- Totals from all asset accounts
Liabilities
- Totals from all liability accounts
- What the company owes
Owner's Equity
- Owner's investment to a company
How to Read it:
When reading an Income Statement:
- look at the bottom of the report to see if there was profit or loss within the company
- look to see where the revenue and expenses came from
When reading a Statement of Change in Owner's Equity
- look at ending capital for particular month
- look for additional investments of by owner, net income, and withdrawals by owner.
When reading a Balance Sheet
- look at 6 column worksheet for assets and liabilities
- look at statement of change in owner's equity (ending balance) for owner's equity
- look at totals of assets
- add totals of owner's equity and liabilities to get total
- look to see if totals of assets and totals of owner's equity and liabilities match