Financial statements are an incredibly useful tool to gauge a business’ financial health and yearly performance. The information provided by a financial statement is also very valuable to investors as well as business owners. Since these statements are incredibly valuable, it is important to have them completed by a professional who is experienced and will assemble the statements in sequence. The sequence is very important because one document is needed to prepare the next.
FINANCIAL STATEMENT SEQUENCE:
- An income statement, otherwise known as a profit and loss statement, adds your revenues and subtracts an itemized list of all your expenses to come up with a profit or loss for the period. With an accurately prepared income statement, you can track revenues and expenses to determine the overall performance of your business, discover which areas of your business are under or over-budget, and determine your income tax liability.
Statement Of Retained Earnings
- Retained earnings are defined by being an income that is retained by the company to be reinvested instead of being paid as dividends to stockholders. The statement of retained earnings is useful for understanding the changes in retained earnings throughout the year and for comparing one year to another year.
- Essential to evaluating small businesses’ financial health, a balance sheet allows you to quickly and accurately identify the strengths and weaknesses of your business.
- Identify and analyze trends in your receivable and payable accounts, and determine whether or not your business is in a position to expand.
Statement Of Cash Flows
- The statement of cash flows identifies changes in cash flow generated from operating, investing and financing activities, along with other investing and financing activities. Together, they make up the statement of cash flows. The statement of cash flows measures a company’s financial stability and its ability to pay its creditors.
Allow Joseph Falco Accounting to prepare and analyze your financial statements—experience the benefits they can offer to your growing business. Contact us today to schedule a free consultation.