The are many times that companies might

The balance sheet is the financial statement that shows a
company’s assets, liabilities and equity at a given point in time. The balance
sheet gives investors information on liquidity and solvency. It also shows
equity of a company compared to the company debt. On the balance sheet, the
company’s assets are listed in order of their liquidity. The company’s
liabilities are listed by what is due earliest. When it comes to the equity
section, it contains the common stock, capital in excess of par and retained
earnings. Another important part of the balance sheet is that Assets equal the
liabilities and stockholders’ equity. The income statement is a financial statement
that presents the revenues, expenses and income of a business over a specific
time period. Revenues represent gross income of the company during the period
of time. Expenses represent the cost of providing goods and services during a
given period of time. Net income is the remainder after expenses have been
subtracted from the revenues. The statement of cash flows is the financial
statement that shows how cash is flowing in and out of the company over a given
period of time. The statement of cash flows shows cash flows in a company’s
operating, investing and financing activities. It also shows the overall net
increase or decrease within the company.

            Accountants
and investors look at these financial statements to learn about a certain
company and how they operate. There are many times that companies might look
great but when you look at their financial statements, a company can be losing
money at a rapid rate. Investors look at these statements because it shows the
potential value in a company. If it looks like the company has growing value
then investors will be willing to invest in the company. Financial statements
also reflect the reputation of the company and how they conduct business. It
helps measure profitability, liquidity, debt and asset activity as well.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now