Financial
statement of the company prepared each year to represent the financial
condition of the company. Financial report gives a report of the company’s
financial health and its performance of the entire period. The financial
reports are prepared to give an overview and report to the stakeholders, board
members, owners and regulatory authorities. The report gives them the idea of
the overall performance of the company’s financial condition. Whether the
company has faced any financial problems or it has been a profitable year for
the company.
There are six
main elements of the financial report by Ph.D dissertation writing service.
Assets
Assets are the
resources of the company. Assets could be in any form, the financial and
non-financial assets. Human resource is also an asset of the company. In
financial report, the list of those items is prepared as assets that company
owns and it has future value. The assets can be of any type, the physical
assets that include the factories, building, furniture and equipment’s and
financial assets are the accounts receivables. The list of intangible assets is
also prepared in the financial report of the company such as brand value and
trademark.
Liabilities
Liability is a
major element of the company’s financial report. Liabilities are the
obligations of the company towards other companies and individuals. In a
financial report the list of those items is prepared which can cost money to
the company in future. Liabilities are both short term and long term. The short
term obligations include the accounts payable, rent of the building and the
payroll payable, it includes that payroll which has been prepared but not paid
yet. The long term liabilities include the cost of the environment that is
affecting the company and debt etc.
Equity
Another part of
the financial report is the equity. Equity is the amount left if the company
sells its assets and pays all its liabilities. The equity belongs to the
shareholders and owners of the company. Equity comprises of the money invested
by the shareholder or owner of the company in the business or the profit and
losses that are earned by the company on behalf of its owners and shareholders.
Revenues
The financial report section on
revenue lists cash inflows from operations. The company produces goods and
services and sells them to customers, and the money earned from this process
are the revenue.
Expenses
Expenses are cash outflows
resulting from operations and overhead. Companies have expenses that they
attribute directly to the generation of revenue, but they also have expenses
independent of operations. Typical operating expenses are salaries for
production workers, materials used in production and shipping. Overhead
expenses are costs such as rent and management salaries, which generate cash
outflows even in the absence of any operations.
Profit and loss statements
summarizes the performance of the company. When expenses are subtracted from
revenues, it gives the company profit and loss statement. Profits or losses
over several years affect the value of the company by increasing or decreasing
total owner or shareholder equity.
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