1. There are four primary financial statements that companies use to help the company, stockholders, investors, customers, and employees. Then main four financial statements used are balance sheets, income statements, stockholders’ equity, and cash flow statements (Bethel University, 2011). 2. Information that is found on each of the statements is useful information for the company to best determine where their financial means are being spent. All four statements have the name of the company, a title statement, a date to show what time period the statement is for, and a unit of measure to show amounts of dollars for each statement. Balance sheets are used to show the company’s assets, liabilities and stockholders’ equity. This is to show where …show more content…
This information is important to have, because if the company had to borrow money, how much it cost to produce the products, and how much the operating expenses are. The income statement is to help determine if the company is making or losing money (Bethel University, 2011). Statement of Stockholders’ equity is to show the last year of retained earnings, it shows the net income from the income statement for the year, it has the dividends during the whole period of the year, and it has the ending retained earnings. This statement is used to help the company keep track of any changes in the stockholders’ equity. It also shows the relationships between the balance sheet, income statement, and the stockholders’ equity (Bethel University, 2011). The cash flow statements are used to describe the operating activities, investing activities, and the financing activities. The statement will show if the net balances have increased or decreased in cash during the year. Cash balance will also be added in from the previous year. The cash balance for the year will determine the ending cash the company must either start paying on their debt they owe or expand within the company (Bethel University,