Getting a Financial Report Ready for Prime Time
In This Chapter
Making sure that all the pieces fit together
Looking at the various changes in owners’ equity
Making sure that disclosure is adequate
Touching up the numbers
Financial reporting on the Internet
Dealing with financial reports’ information overload
The primary financial statements of a business are:
- Profit and Loss statement: Summarises sales revenue inflows and expense outflows for the period and ends with the bottom-line profit, which is the net inflow for the period (a loss is a net outflow).
- Balance Sheet: Summarises the financial condition at the end of the period, consisting of amounts for assets, liabilities and owners’ equity at that instant in time.
- Cash flow statement: Summarises the net cash inflow (or outflow) from profit for the period plus the other sources and uses of cash during the period.