Financial Statements
Key reports (Balance Sheet, Income Statement, Cash Flow) on an entity’s finances.
Detailed Description
Financial Statements
What are the three primary types of financial statements?
The three primary types are the Income Statement, Balance Sheet, and Cash Flow Statement.
What is the purpose of financial statements?
The purpose is to provide relevant financial information for decision-making, helping stakeholders evaluate profitability, liquidity, and financial stability.
What key components are found in an Income Statement?
Key components include revenues, cost of goods sold, gross profit, operating expenses, and net income.
How do public and private financial statements differ?
Public companies must disclose their financial statements publicly and adhere to strict regulations, while private companies have more flexibility and are not required to disclose their financial information.
What is ratio analysis in the context of financial statements?
Ratio analysis evaluates a company's performance and stability using financial ratios like the current ratio and profit margin.