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FINANCIAL STATEMENT

DEFINATION:

“Financial Statement is the record of financial activity of an individual or business concern”.

In other words,

It is the report of financial institution which describes the financial position of business concern.

INTRODUCTION:

Financial statement shows the company’s performance for whole financial year. It show the company financial position for whole year. It shows the financial health of the company after one or half year.  It includes the income statement and balance sheet of the company some time it shows the cash flow statement. The financial statement of the company may be compiled after half, quarter or one year. It include these statements which are as under,

• Balance Sheet
• Income Statement
• Statement of retained earnings
• Cash flow statement

BALANCE SHEET:

Balance sheet shows the financial position of company after compiling the assets, liabilities and owner equity of the company.

INCOME STATEMENT:

This statement shows the company’s income and expense situation which utilize the company in its financial year and it shows the correct detail of company’s net profit or net loss situation.

STATEMENT OF RETAINED EARNINGS:

This statement shows the company’s reserved amount after the financial year end.

CASHFLOW STATEMENT:

This statement shows the company cash flow activities such as investing activity, financial activity and operating activity.

Tags: Assets of Financial Institution, Cash Flow Statement, Financial Statement, Income Statement, Investing Activity, Operating Activity, Statement of Retained Earning