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Primary Financial Statements Paper

1098 Words5 Pages

Primary Financial Statements There are four basic financial statements. They are as follows: balance sheets, income statements, statement of stockholders’ equity, and statement of cash flows. Balance Sheets reflect a fixed point in time. Not only does the balance sheet show what a company owns, but it also shows what it owes. Income statements are used to detail how much money a company has spent, and how much money they have made. Cash flow statements show the detailed exchange of money between a company and the business world outside of the company. Lastly, the statement of shareholder equity tracks the changes of the company’s shareholder interests (Beginners’ Guide to Financial Statement, 2007).
Balance Sheets Balance sheets can be broken …show more content…

• Investment Analysts: When left with the decision on whether they should recommend a company to their clients outside analysts may want to see a company’s financial statements (Users of Financial Statements, 2014).
• Investors: In order to better understand, and protect their investment investors will likely require financial statements to be provided (Users of Financial Statement, 2014).
• Lenders: Will require financial statements in order to determine the ability of a company to pay back loaned funds and interest charges (Users of Financial Statement, 2014).
• Rating Agencies: In order to give a company a credit rating a rating agency will need to review a company’s financial statement (Users of Financial Statement, 2014).
• Suppliers: In order to make the decision on whether to extend credit to a company they may first require a financial statement (Users of Financial Statement, 2014).
• Unions: Financial statements will be needed in order to evaluate the ability of a business to pay compensation and benefits to the union members they represent (Users of Financial Statement,

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