Fin 200 Discussion Financial Statement

What are the four main financial statements How are the four main financial statements used to determine a firms profitability by both internal and external users There are four main financial statements that make summary of financial status of any organization. They are prepared at any point of the year depending on the organizational needs i.e end of year, quarterly and monthly. They include The Balance Sheet A HYPERLINK javascriptvoid(0)balance sheet reports the financial position of an organization at a specific time (amount of assets, liabilities, and stockholders equity) .It gives summary of the assets, liabilities and shareholders equity of a company. It is shown by the formula below. Assets Liabilities Shareholders Equity The Income Statement The income statement is an important financial statements used by business owners and accountants. It also has other names such as statement of operations, profit and loss statement (PL) or statement of income even though is widely referred as income statement and profit and loss statement .Its a crucial document because it shows how profitable a company is. Statement of Retained Earnings The statement reports the way that net income and the distribution of dividends affected the companys financial position during the accounting period.