Accounting and Financial Statements The purpose of accounting is to provide managers with the information they need to evaluate the liquidity of an organization. The balance sheet, income statements, statement of owner's equity, and statement of cash flows are financial statements that provide a basis on which managers, investors and creditors can make decisions. Of the four financial statements only the balance sheet, whose amounts are carried over from year

Financial Statement Differentiation Analysis of the Use of Four Types of Financial Statements The four fundamental types of financial statements include the balance sheet, income statement, statement of retained earnings and statement of cash flows and each meets a very specific series of needs within a business. Investors are most interested in the risk profiles of companies they are interested in investing in more than any other information element. Creditors are most

Accounting The role of financial statements in investing is that they provide a consistent format that can be used by potential investors and other stakeholders to evaluate a company. There are several components that facilitate this happening. For publicly-traded firms, Generally Accepted Accounting Principles (GAAP) play a key role in the creation of financial statements. GAAP is a common set of accounting principles and procedures that companies use to compile their

Working capital reduction is not always a bad thing -- tightening receivables and inventory turns is often considered to be good financial policy. In the case of Unilever, it is important to synthesize the two statements. We can see, for example, that "unusual expense" is the category most responsible for the change in working capital. At this point, it would be advisable to delve deeper into the comments in the

Financial Statements Accounting is a means of keeping track of a firm's financial transactions. There are two different types of accounting, financial and managerial. Financial accounting focuses on the construction of financial statements with the intention of providing an accurate overview of the firm's financial condition. The four major financial statements are the income statement, the balance sheet, the statement of changes in owner's equity and the statement of cash flows

Financial Statement Review Costa Company Balance Sheet Assets Cash Accounts Receivable Equipment (net of depreciation) Inventory Total Assets Liabilities Accounts Payable Long-term Debt Total Liabilities Stockholder's Equity Common Stock Paid in Capital Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder Equity Costa Company Income Statement Revenue Cost of Goods Sold Gross Profit Expenses Depreciation Expense Insurance Marketing Misc Expense Property Taxes Salaries Utilities Rent Total Expenses Net Income Balance Sheet errors effect the presentation of assets, liabilities, and equity where the Income Statement errors effect the classification of revenues and expenses (Kieso, Weygandt, & Warfield 2008, p 1174). The physical count of inventory shows the