Financial statments-contents
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Because you have new members on your investigative team who have little experience with financial statement analysis, you have decided to offer a mandatory training session for your team. Develop a handout for the training session that explains each of the basic financial statements and describes how the information contained in each might be used by investors, creditors, and other users. Be sure to include the types of information that can be found on each financial statement.
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Solution Summary
The answer contains the contents of each basic financial statement and the uses of each statement.
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Dear Student,
Because you have new members on your investigative team who have little experience with financial statement analysis, you have decided to offer a mandatory training session for your team. Develop a handout for the training session that explains each of the basic financial statements and describes how the information contained in each might be used by investors, creditors, and other users. Be sure to include the types of information that can be found on each financial statement.
The hand out for the training session:
The Basic financial statements are:
1. Profit and loss account.
2. Profit and loss appropriation account (statement of retained earnings)
3. Balance sheet
4. Cash flow statement
Financial statements consist of profit and loss account, Balance sheet ,statement of retained earnings and the cash flow statement. Profit and loss account depicts the operating efficiency of the company and it shows whether the company has earned profit or loss during the particular financial year. Balance sheet shows the financial position of the company on the particular date i.e., usually at the end of the financial year. Cash flow statement shows the cash flow from operation and the inflow and outflow of cash and shows the solvent position of the company. Statement of retained earnings show the amount of profit accumulated from the previous years' profit and the profit earned and dividend paid during the ...
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