Types Of Statements That Make Up An Owner 's Equity Section On A Corporate Balance Sheet

1156 Words Mar 7th, 2016 5 Pages
Keeping Track The paper is to discuss some of the major types of statements that are typically used within business firms to keep track of finances. To further explore these statements, the major components will be identified. Different accounts that make up an owner’s equity section on a corporate balance sheet will also be analyzed. Furthermore three categories of ratios that firms use in analysis and their benefits will be examined.
Business firms are under constant scrutiny by consumers, shareholders and even their own board of directors. Keeping track of finances is imperative, not only to please shareholders, but stay in business. There are a wide variety of statements that will enable a firm to keep track of their finances. These statements include income, cash flow and balance sheets. Furthermore it is important to understand the different accounts that an owner’s equity within the balance sheet is comprised of. Finally, in order to see various aspects of a firm, ratios are utilized in order to analyze financial statements in several areas, including comparing to other industries.
Income Statement In order to understand an income statement one must know what an income statement is. An income statement is a financial report that illustrates the revenue and expenses that are generated and incurred by a firm over a certain period of time (Melicher, 2013, p. 357). This time period can be a quarter (three month periods) or even yearly. There is a…
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