Financial Statements Of A Business 's Stock Price Essay

A balance sheet gives an overall picture of a company's financial situation by showing the total assets of a business, including liabilities plus equity. Current assets can include cash, accounts receivable, inventory and prepayments for insurance. The balance sheet is used by investors to get an idea of what the shareholders have invested, including

* A balance sheet is snapshot of the financials for that organization (with assets on the left and liabilities on the right side) for that particular date that was requested

The balance sheet (BS) is significant to a business due to its ability to provide a “snapshot” of a company’s assets and liabilities at any given time. This financial document is a cursory representation of a business’s health. The use of comparative BS whether it be yearly, quarterly, or monthly provides the interested parties a tool to observe trends that are positive, negative, or neutral to a company’s financial health (Finkler, Jones, and Koyner,2013) .

The first of the financial statements is the income statement. The income statement states the revenues and expenses in an understandable way that shows a clear picture of net income or net loss for the

A balance sheet is the most basic and essential financial statement for any organization. It contains the basic

Income statements generally report on a period matching the standard accounting periods of the business, or may cover a specific period as defined for research purposes. At the core, the income statement provides a key measure of the profitability of a business. This differs from the liquidity or cash on hand of a business, but instead examines the business’ ability to bring in revenues that exceed expenses over a given period of time (Hofstrand, 2009).

The Balance Sheet is another type of financial statement used by a company to see a snapshot of the company's financial position at a particular point in time. It lists the value of the company's assets followed by its liabilities. A balance sheet can be summed up by a simple equation:

The balance sheet is one of the major and critical financial statements that show the financial position of the company. The balance sheets tell the user of the

This is the source of the value of the company to its stockholders and to the stock market analyst (Yahoo Finance, 2013). The Balance Sheet may also indicate a negative Shareholder Equity which means the shareholders are losing money. The Balance Sheet also illustrates the trends in borrowing the company has used in the last year. The long term debts that are listed on the balance sheet compared to assets may indicate a problem if the debts are called in by the loaner for some unforeseen reason. There are multiple methods or ratios for determining the future profitability of a company indicated by the line items on the balance sheet (Mertz.J., 2000).

WHAT IS INCOME STATEMENT? This income statement tells how much money a company has brought in (its revenues) how much it has spent (its expenses) and the difference between the two (its profit). The income statement show’s a company’s revenues and expenses over a specific time frame. This statement

2.Describe the information that is found on each statement. Balance Sheet reports the financial position (economic resources and sources of financing) of an accounting entity at a point in time.

The balance sheet shows the firm’s financial position with respect to assets and liabilities at a specific point in time. An example of a balance sheet is presented in Table….. The balance sheet provides three types of information: assets, liabilities, and owners’ equity. Assets are what the company owns, and they include current assets those that can be converted

The Balance Sheet give investors an idea what the company owns, and owes, as well as the amount invested by shareholders. The Balance Sheet also provides a glimpse of the company's assets, liabilities and shareholders' equity at a specific point in time. The Balance Sheet helps to give us the financial status of the company. (Investopedia 2016)

The “financial statements are formal reports providing information on a company's financial position, cash inflows and outflows, and the results of operations” (Hermanson, p.22). There are four main components that make up a financial statement. The four parts are, balance sheet, income statements, cash flow and, statement of owner’s equity. The balance sheets role is to define the company’s assets liabilities and revenue of the business. The income statement shows the income within the company. Cash flow reviews the position of the company by cash payments and receipts. Lastly, the statement of owner’s equity shows the amount of earnings, stock and other capitals of people in the company. (Hermanson, p.34-35).

Using Financial Statements to evaluate a corporation The basic financial statements are the primary means for providing information of the company and are prepared from the balances of the accounting records of the company at a given date. Classification and summary of accounting data are properly structured financial statements. These are Income Statement, Accounting Profit, Economic Profit, and Balance sheet.