Financial Statement Differentiation

Analysis of the Use of Four Types of Financial Statements

The four fundamental types of financial statements include the balance sheet, income statement, statement of retained earnings and statement of cash flows and each meets a very specific series of needs within a business. Investors are most interested in the risk profiles of companies they are interested in investing in more than any other information element. Creditors are most interested in the cash flow of the business, and if the current level of liabilities and payments to keep them current also allow for payments on potential new debt or investment (Bordeianu, Bordeianu, 2009). Managers often have the most intensive information requirements, as they must balance the planning, organizing, leading and controlling of a business with all available financial information. Managers also have the added responsibility of managing risk on new business ventures while mitigating the costs of...
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