DH0516 - Financial Statement

Here’s a overview of financial statements:
Financial statements are formal documents that provide an overview of a company’s financial health and performance. The main types of financial statements are:
Balance Sheet: This statement provides a snapshot of a company’s assets, liabilities, and shareholders’ equity at a specific point in time. It shows what the company owns, what it owes, and the amount invested by shareholders.
Income Statement: Also called a Profit and Loss (P&L) Statement, this report shows a company’s revenues, expenses, and net income over a period of time, typically a quarter or a year. It demonstrates the company’s ability to generate profits.
Cash Flow Statement: This statement tracks the flow of cash in and out of a business. It categorizes cash flows as operating, investing, and financing activities. This allows analysis of a company’s liquidity and ability to meet short-term obligations.
Statement of Shareholders’ Equity: This report outlines the changes in a company’s shareholders’ equity, including retained earnings, additional paid-in capital, and treasury stock, over an accounting period.
Together, these financial statements provide a comprehensive view of a company’s financial position, profitability, and cash flows. They are essential for investors, creditors, and management to evaluate a company’s performance and make informed decisions.
The information in financial statements is typically prepared according to Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) to ensure consistency and comparability across companies.