1) income statement- includes revenue, net profit, operating expenses,
detailed information about businesses income is determined in the difference of revenue and operating expenses that is equal to net profit. helps business to see how much income it has and is good for investors to know it
important because understand/ analyze the sourse of revenue, the source of costst, taxation, the profitability.
also includes cost of goods sold.
balance sheet- the difference between assets and liabilities that is equal to owners equity.
assets: equipment, building,
current- that are converted to the cash for the short period of time non-current - that takes a long tome
intangible- land, building equipment
liabilities: accounts payable( a current liability that a company owes to others by buying merchandise or service on credit but not paid yet for)
bond payable(long-term liabilities)
notes payable(short-term or long term liabilities that a fo=irm must pay for a certain date)
also, current, not current and intangible.
represents financial condition at a specific time
is good for banks because they see what you own and owe
cash flow statement
detailed report on cash inflows and outflows
inflow: sales, debtors pay their bills, investors money
outflow: purchase of equipment, interests paid on banks loan.
it is better report thanincome statement
important for lenders and investors
tells you where the money went.
provide better KPIthan profit and loss statement
helps with financial decisions