Understanding Financial Statements

Chapter: 8 Understanding Financial Statements

Section: 1 Financial Statements

Companies report their performance and financial position on a periodical basis typically quarterly or annually. An annual report carries financial statements and other information relating to business operations along with comparative figures of previous financial years. Some organizations go to the extent of providing five or ten years financial highlights with the annual report.

In an annual report the following financial statements and other reports can be found:

1. Balance sheet
2. Income statement
3. Cash flow statement
4. Change in shareholders' equity
5. Auditors' report
6. Notes to financial statements
7. Management report
8. Directors' report

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