Financial statements offer a window into the health of a company, which can be difficult to gauge using other means. While accountants and finance specialists are trained to read and understand these documents, many business professionals are not. Investors use this...
The three main types of financial statements are the balance sheet, the income statement, and the cash flow statement. These three statements together show the assets and liabilities of a business, revenues, and costs, as well as its cash flows from operating,...
Equity is important because it represents the ownership interest of shareholders in a company. Equity can also be used to give insights into a company's financial health. For example, a high equity ratio (the ratio of equity to total assets) suggests that a company is...
In other words, this measures their stake in the company and how much the shareholders or partners actually own. This section is displayed slightly different depending on the type of entity. For example a corporation would list the common stock, preferred stock,...
Report the balance of cash and cash equivalence that is to the entity at the reporting date. It could be cash on hand, petty cash, cash deposit in the bank, or other financial note that are equivalent to cash. The equity section contains the information that records...