5 Types of Financial Statements

5 Types of Financial Statements
There are at least 5 types of financial reports. The following is a brief explanation and example.
1. Balance Sheet
The first type of financial report is the balance sheet. The balance sheet is a company's financial report that
records information related to assets, liabilities that must be paid to other parties, and capital owned by
business owners in a certain period.
With this balance sheet, it will make it easier for business owners to identify the assets, liabilities, and capital
needed in the coming period.
Not all types of companies record through this balance sheet report, especially in conventional businesses,
and are classified as small-scale. It's another case, if a company has a large scale and has a legal umbrella, they
generally already have a balance sheet report.
The form of a balance sheet is divided into two, namely control (horizontal or T-shaped) and Staffel (vertical).
In the type of balance sheet financial report, it must contain the following 3 elements:
 Assets
Assets are assets owned by business entities that are used to support business activities and can be converted
into cash. These assets can be physical or non-physical assets originating from transactional activities or past
activities.
Examples of assets in a business are cash/money, land, machine tools, inventory equipment, and property.
Meanwhile, non-physical assets can be in the form of royalties, patents, and intellectual property.
Generally, a company has 4 types of assets, namely:
 Current assets
 Fixed Assets
 Long-term investment (Long term investment)
 Intangible Fixed Assets
Usually, the Assets post is in the left position on the Balance Sheet.
 Equity
Equity is the capital included by the owner of a company. In other words, equity is the ownership rights to the
company's assets after deducting the liabilities. This amount of equity will decrease if the owner of the
company withdraws a certain number of assets. Usually, the location of this equity item is on the right side of
the Balance Sheet together with the liabilities item.
2. Income Statement
The second type of financial report is the income statement. As the name implies, the income statement
contains information about whether a company experienced a loss or profit in a certain period. Income
statements are usually made at the end of the year or the end of the month. This type of financial report is
very important for management because it is used as material for evaluating financial performance for 1 year.
What are the points that can lead to gains or losses, whether there are costs that are too large to be charged
or the income earned is in line with the target or not.
There are 4 elements contained in the income statement, namely:
 Revenue
 Expenses
 Profit
 Loss
To determine the profit earned, it is also divided into 5 types, namely:
1. Gross Profit
2. Operating Profit
3. Profit Before Tax
4. Net Income
5. Current Operating Profit
3. Cash Flow Statement

The third type of financial report is the statement of cash flows. A statement of cash flows or commonly called
cash flow is a type of financial report that contains information about expenditures and cash inflows made by
a business entity during a certain period. This information contains details regarding the amount of cash
received, debt expenses and payments, and so on.
The function of the cash flow statement is as a means of evaluating the company's ability for future business
activities. From the cash flow statement, it can be seen whether the company can pay its obligations/debt or
not.
There are 3 important elements that must be included in the statement of cash flows, namely:
1. Operational Activities
Cash flows from operating activities can come from the sale of goods or services from customers, purchases of
company equipment and tools that have an asset life of less than 1 year, and other operating expenses. In
other words, cash flows from operating activities contain the company's main revenue-generating activities.
2. Investing Activities
Meanwhile, cash flows from investing activities are cash flows that include transactions for purchasing assets
that have a lifespan of more than 1 year or long-term benefits. For example, buying stocks and bonds,
purchasing property, and other equipment.
3. Financing Activities
The last component of the statement of cash flows is the component that comes from financing activities. This
funding activity can come from activities that can increase or decrease the company's capital. Therefore, the
financing activity post is closely related to dividend payments, repayment of long-term credit/debt, and the
like.
4. Statement of Changes in Capital
A report on changes in capital or equity is a type of financial report that contains information about changes in
equity at a certain time. Through this report, readers can see various changes related to incoming and used
capital. This report is generally prepared after the income statement and balance sheet.
The capital change report consists of several important parts:
 Initial capital
Contains information on the amount of existing capital at a certain time period.
 Additional Capital
Contains information regarding the addition of business or company capital over a certain period of time. For
example, additional capital in the form of dividend payments retained earnings and additional paid-in capital.
 Decrease in Capital
Presents information regarding a decrease in existing capital at a certain time. For example, the decrease in
the capital in the second quarter is due to last year's dividend payments that have not been paid.
 Final Capital
Displays the amount of the final capital for a certain time.
The existence of a report on changes in the capital is very useful for business owners, stakeholders, investors,
and parties who have authority over the company to find out changes in equity, evaluate, and plan the
company's finances in the future.
5. Notes to Financial Statements
The fifth type of financial report is the Notes to Financial Statements. This report contains additional
information from the four reports above to help readers understand the existing financial reports.
The record usually consists of several sub-sections which include:
 General information
Generally contains information about a business or company. For example, company name, address, and
purpose of establishment.
 Accounting Principles Used
The principles used to prepare financial statements, such as fair value accounting principles and historical cost
accounting principles.
 Existing Assumptions
Assumptions used to prepare the report. This assumption is closely related to economic terms. For example,
the assumption of economic life and reasonable interest rates.
 Method Used
Presents information about the methods used during the process of preparing financial statements. For
example the depreciation method, recognition method, and expense recognition method.
 Other Information Considered Important
As the name implies, this sub-section contains other important information, such as information on
transactions with certain parties, long-term contracts, and financial risks.
In short, Notes to Financial Statements (CALK) are very useful to make it easier for readers to understand the
financial statements presented.
BFI friends, that was an explanation regarding the types of financial reports. These five types of reports
certainly have an important role in business management. We hope that this information can help you
understand financial reports easily.
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