Financial_Statements

Financial Statements Jonathan Betts ACC 362 June 4, 2006 Vaughn Johnson There are four basic financial statements used today. These statements are essential for a business to succeed. The four financial statements in question are an income statement, retained earnings statement, balance sheet and statement of cash flow. Each of these statements are different but equally important when it comes to keeping track of money. An income statement presents the revenue and expenses and resulting net in-come or net loss of a company for a specific period of time. These statements can help a company to see whether or not a new strategy is paying off. Analysis of such statements can help a company to turn around a business and help it succeed where it was once failing. At Foster Poultry Farms we are constantly distributing these types of statements in the form of Business Reviews for our customers. These reviews have been important with helping to develop our company as a high quality and premium When creating a business review at Foster Farms we are not only using income statements, we are also using retained earning statements. A retained earnings statement summarizes the changes in retained earnings for a specific period of time. Periodic and Quarterly retained earning statements are used to analyze current and future market changes as well as in keeping track of a businesses success. The third financial statement is a balance sheet. A balance sheet reports the assets, liabilities, and stockholders’ equity of a business enterprise at a specific date. This sheet is one of the most important sheets a company has that deals with financials. This sheet gives a company and idea on what it owes and owns. (Investopedia.com) And the last financial statement of the four is a statement of cash flow. A statement of cash flows summarizes information concerning the cash inflows (receipts) and outflows (payments) for a specific period of time. Journal entries can be seen as a statement of cash flow that can help a business keep track of money inflow and outflow. Cash flow looks at three ways in which cash enters and leaves a company. These three ways are operations, investing and financing (Investopedia.com). The operations section measures the inflows and outflows of money in and out of the business. The investing section deals with investments, assets or changes in equiptment. Each of these financial statements is important for a business to keep track of and provide. Businesses that are open to stockholders make these statements public and can normally be found on their internet websites. References Haekal, Reem, (2004) What is a Cash-Flow Satement' www.investopedia.com. Retreived from http://www.investopedia.com/articles/04/033104.asp , June 4th 2006