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Financial Statments Paper

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Much of today’s success in the business world is tied in with numbers in the form of accounting and financial statements. Able to understand and properly use these statements is a critical component in truly knowing a business and properly assessing its total performance. In the accounting world there are four main financial statements commonly understood and prepared for most corporations and many small and medium-sized businesses: the income statement, the balance sheet, the statement of cash flows, and the statement of retained earnings, which may be referred to as shareholders’ equity. An essential ability to interpret properly the information these statements contain allows internal and external users to make a wide range of decisions affecting company operations and decisions on whether or not to invest. Financial Statements Descriptions
The balance sheet can be used by executives or investors to define the total of assets, liabilities, and stockholder equity that a business has. Also it can give an organization’s leaders a chance to know financial health of the company. The income statement is used for tracing the statement of present operations. The documentation provides leaders with information on revenue, income, and expenses. The document provides the reports of shareholding positions in the company. It is also likely to be used because the supportive information, such as interest payments, tax payments, and offers a report on shares. The statement of equity shows the activity, which the company’s owners for a specified period. It will also show changes in assets and liabilities that does not influence income, such as unrealized gains and losses on securities, or increases, and decreases in pension liabilities. The statement of cash flows shows the cash inflows and outflows of the

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