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


Heading:
  • Name of Company
  • "Income Statement"
  • "For the month Ending _____"
Comes from the 6 Column Worksheet
Revenue
  • Money company made
Comes from the 6 Column Worksheet
Expenses
  • Money company used
Comes from the 6 Column Worksheet
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

Heading

  • company name
  • "Statement of Change in Owner's Equity"
  • "For the Month ending ______"
Comes from the 6 Column Worksheet
Beginning capital
  • shows amount of capital at beginning of reporting period
  • new company = no balance here
  • company with starting capital = starting balance here
comes from ledger
Increases in capital
  • shows increase of owner's capital over reporting period'
  • investments by the owner of the company
Comes from the 6 Column Worksheet
Decreases in capital
  • shows decrease of owner's capital over the reporting period
  • withdrawals made by the owner of the company
Comes from the 6 Column Worksheet
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
Comes from the 6 Column Worksheet

Assets

  • Totals from all asset accounts
Comes from the 6 Column Worksheet

Liabilities

  • Totals from all liability accounts
  • What the company owes
Comes from the 6 Column Worksheet

Owner's Equity

  • Owner's investment to a company
Comes from the statement of change in Owner's Equity


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



Sources