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    Unit 2 Financial Statement and Cash Flows BBS Notes EduNEPAL - Info

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    Grethel Tarun Malenab
    Financial statements summarize key financial information about a company's performance and financial position over a period of time. They include the income statement, balance sheet, cash flow statement, and statement of changes in equity. The balance sheet provides a snapshot of what a company owns (assets) and owes (liabilities), as well as its shareholders' equity, as of a specific date. The income statement shows a company's revenues and expenses over a period of time, such as a quarter or year. The cash flow statement tracks cash inflows and outflows in a business's operating, investing, and financing activities during a period. Financial statements help owners, investors, and other stakeholders understand a company's operations and financial health.

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    Unit 2 Financial Statement and Cash Flows BBS Notes EduNEPAL - Info

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    Grethel Tarun Malenab
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    Financial statements summarize key financial information about a company's performance and financial position over a period of time. They include the income statement, balance sheet, cash flow statement, and statement of changes in equity. The balance sheet provides a snapshot of what a company owns (assets) and owes (liabilities), as well as its shareholders' equity, as of a specific date. The income statement shows a company's revenues and expenses over a period of time, such as a quarter or year. The cash flow statement tracks cash inflows and outflows in a business's operating, investing, and financing activities during a period. Financial statements help owners, investors, and other stakeholders understand a company's operations and financial health.

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    Financial statements summarize key financial information about a company's performance and financial position over a period of time. They include the income statement, balance sheet, cash flow statement, and statement of changes in equity. The balance sheet provides a snapshot of what a company owns (assets) and owes (liabilities), as well as its shareholders' equity, as of a specific date. The income statement shows a company's revenues and expenses over a period of time, such as a quarter or year. The cash flow statement tracks cash inflows and outflows in a business's operating, investing, and financing activities during a period. Financial statements help owners, investors, and other stakeholders understand a company's operations and financial health.

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    1K views1 page

    Unit 2 Financial Statement and Cash Flows BBS Notes EduNEPAL - Info

    Uploaded by

    Grethel Tarun Malenab
    Financial statements summarize key financial information about a company's performance and financial position over a period of time. They include the income statement, balance sheet, cash flow statement, and statement of changes in equity. The balance sheet provides a snapshot of what a company owns (assets) and owes (liabilities), as well as its shareholders' equity, as of a specific date. The income statement shows a company's revenues and expenses over a period of time, such as a quarter or year. The cash flow statement tracks cash inflows and outflows in a business's operating, investing, and financing activities during a period. Financial statements help owners, investors, and other stakeholders understand a company's operations and financial health.

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    BBS Notes - 2nd Year Finance | www.edunepal.

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    Unit 2 Financial Statement and Cash Flows


    Write Short Notes:
    a. Financial Statement: Financial Statements are the final report of an accounting system that
    are used and designed in the organization. Financial Statement contains summarized
    information of the user regarding the operating performance, financial strengths and weakness
    of firm financial affairs. Financial Statement and report provide information to the user
    regarding the operating performance, financial strength and weakness of a firm. Investor,
    creditors, shareholders, workers, government and financial analysts use this statement. They
    examine the firm's performance in order to make their respective decisions. Financial statement
    consists of different statements like income statement, balance sheet, cash flow statement etc.
    b. Role or importance of financial statement: A financial statement provides information for
    analyzing and understanding of the performance of the corporation. The roles of financial
    statement are given as:
    • Financial statement concerned with the past (historical) record of the corporation.
    • Financial statement provides an estimate of future financial course of action.
    • Financial statement enables to acquire the knowledge about comparative cash flow position
    of a firm throughout two comparative periods.
    • Financial statement provides the clear picture of corporation’s financial situation for the
    interested group like shareholders, creditors, managers, and other stakeholders.
    • Efficient analysis of financial statement will enable to identify the current status and future
    possibilities of the corporations.
    c. Balance Sheet: The balance sheet provides information on what the company owns, what it
    owes, and the book value of the business to its stockholders. Balance sheet presents the balance
    of assets and capital plus liabilities of the firm at the certain date. At that particular point of
    time, balance sheet is prepared.
    d. Income Statement: A company's income statement is a record of its earnings or losses made
    from the business for a given period. It shows all the money a company earned (revenue) and
    all the money a company spends (expenses) during this specified period.
    e. Cash flow statement: A cash flow statement concentrates on transactions that have a direct
    impact on cash. It deals with the inflows and outflows of cash indicating exact amount and
    timing of flows between two balance sheets dates. It explains the change in cash position
    between the two positions. Cash flow means inflow and out flow of cash during the accounting
    period. Cash flow is divided into three categories :- Operating, Investing and Financial
    activities.
    f. Source and Use of Funds Statement or Fund Flow Statement: Funds refer to cash, cash
    equivalent or marketable securities and credit that can be easily convert in to cash. While
    preparing fund flow statement it must be considered under which topic of balance sheet fund is
    coming and under which topic it is spent. Source and use of fund statement are prepared to
    carry out the above purpose. It is a summary of a firm's change in financial position from one
    period to another period.

    Provided by: Everest International College, Soalteemode, Kalimati, Kathmandu. 1

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