The Importance Of Income Statements And The Types Of Expenses

1058 Words5 Pages
Introduction Firm managers, owners, and lenders, keep track of the firm’s performance by reviewing financial statements, income statement, balance sheet, and statement of cash flows. This portfolio will explain the purpose of income statements and the types of expenses that are shown on an income statement. Also, clarify types of assets and claims of creditors and owners shown on a balance sheet. As well as define the three different accounts that comprise the owners’ equity section on a corporate balance sheet. Furthermore, describe a statement of cash flows and the three standard sections contained within it. Finally, identify the three categories of ratios that a business may use in an analysis of its financial statements and the benefits of calculating these ratios.
Financial and Income Statement, Balance Sheet, and Statement of Cash Flows
Income Statement The purpose of the income statement is provides a record of a company 's revenues and expenses for a given period of time and can be used as a measuring stick of profitability. This document provides important financial information to business managers, investors, lenders, and analysts. It is also one of the three major financial statements that all publicly held firms are required to prepare annually. Types of expenses that are shown on a typical income statement are accounts, office supplies, delivery truck, amounts charged to customers for services and products, employees paychecks,
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