Financial Statements Essay Example for Free

Financial Statements EssayThere are quartette basic financial statements that companies use. They begin with income statement, statement of owners equity, balance sheet, and the statement of cash flows. follows use income statements to distinguish how much gold they have made and how much they have washed-out over a specified bound of time. The statement of owners equity is used to report any changes in equity from a accompanys net income or net loss, as well as report changes in the owners investments and withdrawals over a specified goal of time. The balance sheet is used to report a companys financial position at any point in time.This statement includes selective information such as what types of assets and their amounts, liabilities, and equity. The statement of cash flows is the stopping point document out of the four basic financial statements. This statement is used to report how much money a company is bringing in (receipts), and how much they are spending (pay ments), during a specific period of time. Any changes found in assets and liabilities on a balance sheet reflect the revenues and expenses found in the income statement, which in turn results in gains or losses for a company.The statement of cash flows reports more information concerning the cash assets that are listed on a balance sheet and a linked, that not ineluctably the same, as the net income found on the companys income statement. Financial statements are nothing but numbers on a document when theyre on their own, but together, they provide valuable and effectual information for a company to make very big decisions about how to run their company, and how to make decisions for their company in the future. The information is also valuable for investors to make wise and educated decisions for investing in companies.