A financial report--sometimes referred to as a financial statement--is a written report that quantitatively explains how a firm or company uses or distributes funds. Financial reports are completed periodically and include detailed information for accuracy. Typical financial reports include income and cash-flow statements, statement of capital and balance sheets.
Income statements are financial reports that list revenues and expenses from the business’ operation over a period of time. An income statement helps a business see the bottom line. Revenues represent net income and expenses represent net loss.
According to business procedures, an income statement is produced yearly, quarterly or monthly.
A cash-flow statement implicates all sources the company uses during an accounting period. Cash-flow sources include revenues, long-term financing and sales of non-current assets. Increase in a liability account or decrease in a current asset account is also reported on this statement. Other information included on a cash-flow statement shows operating losses, debt repayment and equipment purchases and increases as they apply in any current asset account.
Balance sheets have the equation of assets equal liabilities plus owner’s equity. This report includes everything the company owns, all debts incurred and the value of ownership stake in the company’s equity or capital. Balance sheets are also called a statement of financial condition. It shows a company’s financial position at a specific time in the company’s operation.
Statement of capital shows a change in an owner’s capital accounts over time. Capital accounts show the amount of funds and assets invested in a business by the owners or stockholders over a period of time. In this statement a business owner can see how much of the company they truly own. In general, a statement of capital is prepared after an income statement. This helps the company to see whether or not they have net income, net loss or both.