An Understanding About Financial Reports

An Understanding About Financial Reports

Financial reports are results of a company’s financial standing. Kind of like an earnings reports where they post quarterly results but here it’s just some certain period of time and sometimes the full report of the fiscal year. It is a summary of all the returns, expenses and a record of gains and losses that happened in just a year.

If you can read financial reports, then it would be a good plus for you for it gives you the ability to look at further details on the performance of the company.  And that will help you think further and deeply in any decision you make.

Financial Statements

What can you find in a financial statement?

There are three things that you will find in a financial statement and one of them is cash flow. Here you can find the amount of money that is spent by the company and how much money came to the company. They’re called inflow and outflow. It is the result of investment activities, external actions and internal operations that caused financial situations. These factors affect the revenue of the company and of course the returns that are given to the investors.

Income Statements are the financial statement that shows how much revenue it had and took in a specific period and how much financial support they inclined to put in any activities given. It shows the company’s net losses and earnings. To make it short, in a period of time the company took an amount of money and these went through expenses and this here is where you will find records about it.

Lastly, what you need to read are the balance sheets. Here recorded are the liabilities, assets and net worth equity of the corporation.

Assets are the overall financial reports on all the properties it acquires.

Liabilities are the money that the company owns to its partners or any other external factors.

And lastly are the shareholder equity and here is where you can find records about the company’s net worth if it’s broken down to each shareholders.

Read also: 10 Crucial points when evaluating an investment opportunity.


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