Important Financial Documents for an Organization

A balance sheet is a statement of the assets and liabilities of a business going into depth of what the balance of income period.

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

Current assets - Cash and other resources that companies reasonably expect to convert to cash or use up within one year or the operating cycle, whichever is longer. Current liabilities - Obligations that a company reasonably expects to pay within the next year or operating cycle, whichever is longer. Current ratio - A measure used to evaluate a company's liquidity and short-term debt-paying ability; computed as current assets divided by current liabilities. Debt to total assets ratio - Measures the percentage of total financing provided by creditors; computed as total debt divided by total assets. Earnings per share (EPS) - A measure of the net income earned on each share of common stock; computed as net income minus preferred stock dividends divided by the average number of common shares outstanding during the year. Economic entity assumption - An assumption that every economic entity can be separately identified and accounted for. Financial Accounting Standards Board (FASB) - The primary accounting standard-setting body in the United States.

Separately, the balance sheet reports a company’s financial position while the income statement reports a company’s fiscal year profits and losses. The balance sheet measures a company’s financial position by reporting its assets, liabilities, and owner’s (shareholder’s) equity. The income statement measures a company’s financial performance by reporting its revenues, expenses, and net income/loss. When combined, they serve two vital purposes: (1) expand the accounting equation and (2) enable analysis using ratios to determine industry position or potential material misstatements. The increase or decrease in owner’s (shareholder’s) equity on the balance sheet is a direct result of the net

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

Assets are things that a company owns that have value. This usually means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory. Assets also include things that can't be touched but nonetheless exist and have value, such as trademarks and patents. Cash itself is an asset, as well as

Balance Sheet reports the financial position (economic resources and sources of financing) of an accounting entity at a point in time.

Explain the nature of balance sheets. A balance sheet is one of the major financial statements that a company prepares so that its investors and managers have visibility into the company’s financial position. The balance sheet details a company's resources and obligations. The major parts include assets, liabilities and shareholders' or owners’ equity. The balance sheet is run for

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 “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).

A balance sheet is one of a few noteworthy financial statements you can use to track spending and profit. Also called a statement of financial position, a balance sheet demonstrates what your organization claims and what it owes through the date recorded, as Accounting Coach expressed. It shows this data regarding your organization 's advantages, liabilities, and value.

Accountants, business owners, investors, creditors and employees use four basic financial statements of an organization to determine the financial well-being and future earnings potential of that organization. Financial statements are a key tool in seeing and understanding the past, present and future condition of an organization. What are these financial statements and what do they mean to the reader? Do the financial statements mean something completely different to an investor, creditor, and employee?

The balance sheet is considered a statement which represents the company’s financial position as of a specific date in which some call a snapshot of the company at a given time. (Melicher & Norton, 2015) It includes information on assets and liabilities. Assets may include current assets which include cash or any assets that can be converted within a year as well as fixed assets which include the physical facilities the company uses for production, storage, distribution or for the displaying of a company’s products. Liabilities on the other hand provide an idea of what is owed to the creditors and owners. This can include accounts payable, accrued liabilities that need to be met which come from current funds and operations. IT also includes notes payable. (Melicher & Norton, 2015)

The balance sheet provides information about the nature and amounts of investments in enterprise resources, obligations to enterprise creditors, and the owners’ equity in net enterprise resources. That information not only complements information about the components of income, but also contributes to financial reporting by providing a basis for (1) computing rates of return, (2) evaluating the capital structure of the enterprise, and (3) assessing the liquidity and financial flexibility of the enterprise.