Three Basic Financial Statement Analysis

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What are the three basic financial statements, and what major information does each contain? Please explain in detail. A Financial Statement is a document for reporting business financial performance and resources. The basic three financial statements are: 1- Income statements: The Income Statement shows the revenue and expenses for specific year (period of time) to determine the company’s profit or loss by comparing the revenues with its expenses. The information listed on the income statement is mostly in relatively current dollars, and so represents a reasonable degree of accuracy. However, it does not reveal the amount of assets and liabilities required to generate a profit, and its results do not necessarily equate to the cash flows…show more content…
Generally, cash flow statements are divided into three main parts for reviewing the cash flow from of this three types of activities: (1) operating activities (CFO); analyzes a company’s cash flow from net income or losses. (2) investing activities (CFI); shows the cash flow from all investing activities. (3) financing activities (CFF); shows the cash flow from all financing activities. Although I discuss each financial statement separately, they are all related because any changes in assets and liabilities that on the balance sheet are also reflected in the revenues and expenses that on the income statement, which result in the company’s profits or losses. Cash flows provide more information about cash assets listed on a balance sheet and are related to net income on the income statement but not exactly the same, And so on. No one financial statement tells the complete story. The three financial statements together can provide a very powerful information for investors or…show more content…
– and explain how you think they help enhance the business owners who use them. List and explain. First of all, I have to say that almost of our daily activities relay on the IT system and we use these systems very much for example: 1- As a student in the university, I use the UOD system for contact the principle or my teachers or even to take exams on the Blackboard or to share the lectures. Also there is a library for E-books and research papers. It helps the teachers and students to share lectures and not to waste time and offer to publish it to each students separately. So, it saves costs for the university itself. 2- I used the hospital's online system to make an appointment for my sister. It helps both the hospital's staff and the patient to save time and schedules the work

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