The Four (4) Financial Statements

• Income Statement


  Frequently an analyst or investor's first stop, shows the company's performance for each period, with sales revenue at the top, then calculates gross profit by subtracting the cost of goods sold (COGS), and other operating expenses and income affect gross profit from there to net income at the bottom
• Statement of Owners Equity (Retained Earnings Statement)


  Shows all equity accounts, including common stock, net income, paid-in capital, and dividends that affect the final equity balance, prepared after the income statement since the period's net income or net loss must be reported here, and prepared before the balance sheet because the amount of owner's equity at the end of the period must be reported there
• Balance Sheet (Statement of Financial Position)


  Shows the organization's assets, liabilities, and owner's equity at a particular moment, balance must be maintained on both sides of the balance sheet: Liabilities and equity must equal assets, the cash and equivalents at the beginning of the asset section should be equal to the balance at the end of the cash flow statement, the balance at the end of each major account for each period is then shown on the balance sheet, net income from the income statement enters the balance sheet as a change in retained earnings (adjusted for dividend payment)
• Statement of Cash Flow


  Subtracts any non-cash expenses from the net income, then uses changes to the balance sheet to calculate cash inflows and outflows, shows the beginning and ending cash balances and the change in cash per period