Minor Assignment 1#

What is Financial Statements?

We have studied about financial statements in the last lecture it shows our standing position, stability,
credibility and value in the market. we have 4 statements which are as below 1 balance sheet 2 income
statement 3 cash flow statement 4 statement of owner’s equity as of all the above the most important
of all is the statement of financial position which can also be called as balance sheet

From these four statements three of them can be called the fundamental financial statements which are
balance sheet, income statement and the statement of cash flow

We have 5 different main accounts referred to the above financial statements which are Assets,
liabilities, expenses, revenue, and equity

Balance Sheet is one of the three fundamental financial statements. These statements are key to both
financial modeling and accounting. The balance sheet displays the company’s total assets, and how
these assets are financed, through either debt or equity. Assets = Liabilities + Equity then we have
discussed about Income Statement Income Statement The Income Statement is one of a company's core
financial statements that shows their profit and loss over a period of time. The profit or loss is
determined by taking all revenues and subtracting all expenses from both operating and non-operating
activities. This statement is one of three statements used in both corporate finance (including financial
modeling) and accounting. Cash Flow Statement of Cash Flows The Statement of Cash Flows (also
referred to as the cash flow statement) is one of the three key financial statements that report the cash
generated and spent during a specific period of time (e.g., a month, quarter, or year). The statement of
cash flows acts as a bridge between the income statement and balance sheet. In the cash flow
statement we have three activities. 1- Operating 2 investing – financing and finally these three core
statements are intricately linked to each other.