ch3.pdf - 1 Annual report Is the most important report that...

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1. Annual report: Is the most important report that corporations issued annually by a corporation to its stockholders. It contains basic financial statements as well as management's analysis of the firm's past operations and future prospects. It also contains two type of information: (1) verbal section) and (2) the four basic financial statements [balance sheet, income statement, statement of cash flow, and the statement of stockholders' equity 2. Four Types of Financial statements: (1) Balance sheet (2) Income statement (3) Statement of cash flows (4) Statement of stockholders' equity 3. Balance sheet: A statement of a firm's financial position at a specific point in time. Shows what assets the company owns and who has claims on those assets as of a given date (e.g. December 21, 2013) 4. Income statement Shows the firm's sales and costs (and thus profits) during some past period (e.g. 2016). They are prepared monthly, quarterly, and annually. The quarterly and annual statements are report to investors, while the monthly statements are used internally for planning and control purposes 5. Statement of cash flows: Shows how much cash the firm began the year with, how much cash it ended up with, and what it did to increase or decrease cash 6. Statement of stockholders' equity: Shows the amount of equity the stockholders had at the start of the year, the items that increased or decreased equity, and the equity at the end of the year 7.
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