Financial Statements

Identify the four basic financial statements.

The four basic financial statements include: the balance sheet, income statement, owners' equity and cash flows. The balance sheet is when there is a focus on the current financial strengths or weaknesses inside a firm. This gives managers, employees, investors and regulators the ability to determine what issues are impacting the company. (Ingram, 2011) ("Four Financial Statements," 2010)

The income statement is concentrating on the profits or losses that were made by a company over a specified period of time. This is designed to provide stakeholders with more precise information about: the activities of the firm and their impact on the bottom line results. When this happens, the company is providing increased amounts of transparency and clarity during the process. (Ingram, 2011) ("Four Financial Statements," 2010)

The owners' equity is looking at how effectively the company is using the funds they receive...
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