Income Statement

Income statements are one of the most important financial documents for any business. They provide a clear picture of your company's revenue and expenses over a certain period of time, which can be used to make informed decisions about your business. Income statements can be prepared on a monthly, quarterly, or annual basis. Generally, the longer the timeframe, the more accurate the statement will be.

Cash Flow Statement

Cash flow statements are an essential tool for financial analysis that show the movement of cash into and out of your company over a period of time. Cash flow statements provide essential insights into your company's financial health, showing how well it is able to generate and manage its cash resources. Cash flow statements can also be used to assess liquidity, solvency, and profitability. Cash flow statements are comprised of three main sections: operating activities, investing activities, and financing activities. Each section shows the inflows and outflows of cash for that particular activity. 

Balance Sheet

A Balance Sheet is a financial snapshot of your company that shows how much it owns (assets), how much it owes (liabilities), and what is left over for owners (equity). 

• Assets. While the balance sheet includes a variety of information, one of the most important things to look at is the "assets" section. This section lists all of the things that your company owns, such as cash, inventory, buildings, and equipment. 
• Liabilities. The "liabilities" section lists all of the money that your company owes, such as debt and accounts payable. 
• Equity. The "equity" section shows what is left over for the owners of your business after all liabilities are paid. This number can be positive or negative, depending on whether you have more assets than liabilities.

Note to Financial Statements

A note to financial statements is a disclosure provided in the footnotes to the statements. The notes typically provide additional information about items on the balance sheet and income statement. In general, notes to financial statements are intended to provide investors (if you have any) with greater transparency into your company's financial position and operations. While not required by Generally Accepted Accounting Principles (GAAP), they are often included in financial statements to provide stakeholders with a more complete picture of a company's finances.

Statement of Change in Equity

Along with the balance sheet and income statement, the statement of changes in equity provides key insights into your company's financial health. The statement shows how your equity has changed over time, providing information on items such as net income, dividends, and share repurchases. While the balance sheet and income statement offer a snapshot of your company's financial position at a specific point in time, the statement of changes in equity offers a more dynamic view, tracking financial progress over time. 

Make a Statement With WWS, CPA 

If you're looking to prepare your own financial statements, we hope that our quick guide points you in the right direction. If a professional accountant is a better fit for you and your business, give us a call for a free consultation. Wayne W. Stanforth, CPA has decades of experience preparing GAAP-compliant financial statements and custom financial analyses that can help bring your business to the next level.