Week 1, Financial Statements

Week 1, Financial Statements - Running head ANALYZING...

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Running head: ANALYZING FINANCIAL STATEMENTS 1 Analyzing Financial Statements Amanda Kelley ACC/225 November 11, 2011 Jason Jones
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ANALYZING FINANCIAL STATEMENTS 2 Analyzing Financial Statements It is important for every business to have financial statements. Financial statements make it easier for business owners, employees, and investors to determine the financial status of the company. There are four different types of financial statements; they are balance sheets, income statements, statements of owners’ equity, and statements of cash flows. A balance sheet is a summary of the company’s business assets, liabilities, and the stockholders equity at a specific point in time. A balance sheet is similar to a snapshot of the business. Creditors analyze a company’s balance sheet to determine if a company is capable of repaying a financial obligation the company might have or want. An income statement describes a company’s revenues and expenses. It also shows the net income or net loss of a company over a period of time. Income statements are used to report
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Week 1, Financial Statements - Running head ANALYZING...

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