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Annual financial report template

Financial reports are an essential part of business operations. The financial disclosures made in these reports presents a picture of the status of a company at any given time within a financial time period.
Financial reports contain information of use to internal and external sources of a company. Internal sources can utilize the financial information to determine if current financial goals are being met. External sources can utilize the information to determine whether or not making an investment in the company is a sound financial decision. External sources include potential investors, current investors, creditors, government agencies and other financial institutions.
Financial reports consist of four main sections: balance sheet, income statement, statement of cash flows and statement of shareholders equity.
Balance sheets provide information on a company’s assets, liabilities and equity standings. Assets are those items that present a favorable financial benefit to the company. These benefits are related to past or current projects that the company is involved in. Liabilities are those items that require a sacrifice on behalf of the company. This sacrifice will be made in the future based on past or current projects the company is involved in at the time of reporting. Equity refers to the residual interest that remains when liabilities have been deducted from assets. The number that remains is considered shareholder equity. This is what shareholders gain by investing in the company operations.
Income statements provide information on a company’s income and expenses for a given period of time. These items are measured by revenues, expenses, gains and losses. Revenues are the items that come into a company to fund general operations. Examples of revenues include sales, rents, interest income and stock dividends paid out. Expenses are items that a company pays out in order to do business. These expenses are a central part of company operations. Expenses include the cost of delivering goods and services, salaries and taxes. Gains and losses are direct increases or decreases in equity. Examples of a gain include rental or dividend revenue. Losses come from interest paid on financial bonds.
Statement of cash flows provide insight as to where a company obtained income, how that income was spent and what changes occurred over the current financial reporting period. Operating income relates to the income obtained from standard business operations. Investment income relates to income from collecting outstanding loans to external sources, eliminating debt and equity assets and purchasing property, plant or equipment items. Financing income relates to repayment to creditors or investments by shareholders.
The final aspect of annual financial report templates is the statement of shareholders equity. In this section, the company’s equity status and how it was affected over the course of a financial year is displayed. This is the shortest report of all four major components to an annual financial report.

September 28, 2008 - Posted by | Blogroll, Financial Repot

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