5 Types of Financial Statements (2024)

FAQs

What are the 5 financial statements? ›

For-profit primary financial statements include the balance sheet, income statement, statement of cash flow, and statement of changes in equity. Nonprofit entities use a similar but different set of financial statements.

What are the five methods of financial statement analysis? There are five commonplace approaches to financial statement analysis: horizontal analysis, vertical analysis, ratio analysis, trend analysis and cost-volume profit analysis. Each technique allows the building of a more detailed and nuanced financial profile.

Defining the accounting cycle with steps: (1) Financial transactions, (2) Journal entries, (3) Posting to the Ledger, (4) Trial Balance Period, and (5) Reporting Period with Financial Reporting and Auditing.

For-profit businesses use four primary types of financial statement: the balance sheet, the income statement, the statement of cash flow, and the statement of retained earnings. Read on to explore each one and the information it conveys.

The balance sheet, income statement, and cash flow statement each offer unique details with information that is all interconnected. Together the three statements give a comprehensive portrayal of the company's operating activities.

Financial statements can be divided into four categories: balance sheets, income statements, cash flow statements, and equity statements.

Different types of financial analysis include valuation, variance, horizontal analysis, vertical analysis, liquidity, profitability, cash flow analysis, and more, which serve various purposes for analyzing a company's overall financial health.

What Are the Types of Ratio Analysis? Financial ratio analysis is often broken into six different types: profitability, solvency, liquidity, turnover, coverage, and market prospects ratios.

The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.

What are the golden rules of accounting? ›

Every economic entity must present accurate financial information. To achieve this, the entity must follow three Golden Rules of Accounting: Debit all expenses/Credit all income; Debit receiver/Credit giver; and Debit what comes in/Credit what goes out.

What is a 3-Statement Model? The 3-Statement Model is an integrated model used to forecast the income statement, balance sheet, and cash flow statement of a company for purposes of projecting its forward-looking financial performance.

Step 5: Monitor and evolve your financial plan

Review your personal financial plan every year or so. Start at the first step to get a snapshot of how your finances are doing, and make any necessary changes to the rest of your plan.

Item #1: The income statement is prepared over a period of time. Item #2: The balance sheet is prepared as of a period of time. Item #3: The statement of retained earnings is prepared over a period of time. Item #4: The statement of cash flows is prepared over a period of time.

Step 5: Make adjusting journal entries

Your next step is to make any adjusting journal entries necessary so your financial statements include relevant information for your working period. There are three types of adjusting entries: Accruals, tax adjustments, and missing transaction adjustments.

The Four Financial Statements Required for GAAP Compliance

There are four different financial statements that GAAP requires companies to report: income statement (or P&L statement), balance sheet, cash flow statement/statement of cash flows, and the statement of owner's equity.

The three core financial statements are 1) the income statement, 2) the balance sheet, and 3) the cash flow statement. These three financial statements are intricately linked to one another. Analyzing these three financial statements is one of the key steps when creating a financial model.

Financial statements are compiled in a specific order because information from one statement carries over to the next statement. The trial balance is the first step in the process, followed by the adjusted trial balance, the income statement, the balance sheet and the statement of owner's equity.