COMPONENTS OF FINANCIAL STATEMENT
In this article we will get to know the components that make up a financial statement.
What is financial statement?
Financial statements are report that summarizes important
financial decision of your business.
There are three main components of financial
statement:
1. Balance
Sheet
2. Income
statement
3. Cash
Flow statement
Balance
Sheet: It’s a snap shot of your business as it currently
stands. It tells about the assets and liabilities. It is broken down into three
categories: Asset, Liabilities and Equity. Asset can be broken down into
current asset and fixed asset. Liabilities are debt you owe other people.
Equity is the remaining value of the company after subtracting the liability
from the assets.
Income
Statement: It tells you how much money a company have spent
and how much profit it has made for a specific period
Cash
Flow Statement: This is how much enters and left your
business over a particular time period.
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