Financial Report

Balance Sheet

A balance sheet is a financial report that provides a snapshot of a company's financial situation at a certain point in time. It gives a general summary of how much a company's assets, liabilities, and owner equity are worth. It compares the value of assets possessed (including cash) to those owed. Retained earnings as well as the owner's equity, or the money invested or accrued, are reported. What it tells you: Whether or not the company is solvent (can pay its liabilities), as well as if it increased or decreased in value from prior balance sheets. To assess the financial standing of the company, a balance sheet, profit and loss statement, and cash flow statement are employed. A typical small business balance sheet is divided into three sections, each having a subcategory: 1 Assets are items that the company has and are listed according to how easily they can be turned into cash.  Liabilities are obligations owing by the company, and current liabilities are presented in date order of due.  Owner's equity is made up of retained profits and money that the owner has invested or amassed (the amount of profit left over for the business after it has paid out owner or shareholder dividends)  Always add up the liabilities and owner's equity before listing the assets on the balance sheet. It should therefore balance. If it doesn't balance, there can be incomplete or inaccurate data as a cause.

Profit and Loss Statement

A P&L or an income statement are other names for a profit and loss statement. The statement can be created for any time period, although it's often done at the end of a month, quarter, or year. What it tracks - Earnings and Expenditure. It informs you if you ran at a profit or a loss throughout that time. All the activity that was noted in your revenue and expense accounts during the given period is summarised in a profit and loss statement. Sales are normally considered income, but costs might include items like rent, insurance, advertising, and payroll. All sales, including credit sales that your customers may not have yet paid for, are included in your P&L statement. It will also contain bills for costs you have incurred but haven't yet paid. A Profit and Loss Statement can also help calculate profit margins which show how well a business can convert revenue into profits.

Cash Flow Statement

A cash flow statement is a financial document that details the sources and uses of a company's cash. It's sometimes referred to as a CFS, or a statement of cash flows. A cash flow statement reveals which areas of the company made money and which ones spent it during a specific time period. It demonstrates whether a company has any issues covering its costs. What it monitors – Business cash entering and leaving the business What it reveals – If cash is leaving the company more quickly than it is coming in, as well as whether it can cover its costs. In a cash flow statement, there are three primary sections: o Cash from operations includes both sales revenue and operating expenses. o Cash flow from investments is the money used to acquire and sell significant goods like real estate and equipment. o Cash flow from financing includes funds contributed by the owner and cash received from or returned to lenders and investors. The majority of your income should ultimately come from operations. A company cannot continue to obtain its funding by borrowing money or selling off assets. A cash flow statement is an essential financial report as it demonstrates a company's ability to pay your bills and pay your employees. It aids in highlighting how much you depend on borrowing to survive. You may use these reports to create budgets and solve cash flow issues. They show how successfully a company can generate revenue, which is helpful to potential investors.