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Information of Financial Statements

Discuss what the information from each financial statement means and why the information is useful to those who read the financial statements for the following:

(from the balance sheet and income statement)
Total Capital
Total Assets
Net Income
Monthly Gross Profit
Total Expenses

(from the statement of cash flow and statement of retained earnings)
Monthly Net Cash Provided by Operations
Yearly Net Cash Provided by Operations
Cash balance at the end of a period
Retained Earnings balance

Solution Preview

Discuss what the information from each financial statement means and why the information is useful to those who read the financial statements for the following:
(from the balance sheet and income statement)

Total Capital

This represents the owner's contribution in the business. This is important to understand the financial solvency of the organization. Higher owner's contribution as compared to the debt indicates lower financial risk for the business.

Total Assets

Total Assets means the properties of the business. This includes current assets and fixed assets of the ...

Solution Summary

Response explains the steps to interpret the Financial Statements

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