financial statements

• income statement


  document showing the business' financial performance over a given time period
• values on the income statement

  sales revenue, gross profit, profit for the year
• sales revenue

  amount of money received for selling goods or services
• gross profit

  profit made from buying and selling goods, sales revenue - cost of sales
• profit for the year

  gross profit - all other operating expenses
• purpose of income statement

  shows profit or loss made by the company from the buying and selling of goods, to compare gross profit and profit for the year over different years of trading to identify trends and aid decision making, to compare to similar companies in similar industries, to compare expenses and sales over the years or between departments to see if there are any areas that can be minimised or improved
• statement of financial position

  value of a business on a particular date
• statement of financial position shows...

  assets and liabilities
• assets


  what the business owns
• liabilities


  what the business owes
• types of assets

  non-current, current, net current
• types of liabilities

  current, non-current