Company financial statements are statements, which uncover the financial information of a particular company.
They provide information about the company’s assets, liabilities, expenses, revenues. Basically, company financial statements are of four types. They are balance sheet, cash flow statements, income statements and statement of retained earnings.
The company financial statements are prepared as per the Generally Accepted Accounting Principles or GAAP. There may be instances when the GAAP may not be followed. The financial statement is then said to deviate from the GAAP. These financial statements are worked out by Certified Public Accountants or the CPAs.
Types of Company Financial Statements:
Company financial statements are important documents, which give an insight into the financial operations of a company. There are four types of company financial statements as explained below:
Balance Sheet: Balance sheet renders information about the company’s financial health on a particular day. The balance sheet provides information about the financial condition of the company at a glance.
Income Statement: is also known as P&L statement or profit and loss statement. It gives information about the company’s profits earned and losses incurred by the company over a period of time. The income statements can be single step income statement, multi step income statement, operating income statement, depending on the information they furnish.
Cash Flow: is the movement of cash within a company. It includes an account of both the incoming cash as well as the outgoing cash.
Statements of Retained Earnings: This financial statement, reflects changes in the ownership of various equities of the company.
Company and its Affiliates:
A company may have several sister concerns and associates. If a company has 50% voting stock, the company is said to be a subsidiary of the parent company. Under these circumstances, the parent and the affiliated companies maintain separate financial accounts. If the financial accounts of both, the parent as well as the associates are merged, we get a consolidated financial statement.
There may be different categories of financial statements, depending on the type of information, it furnishes.
Last Updated on : 26th June 2013