The Basic Elements of Financial Statements
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This paper explains that investors, creditors, managers and employees utilize a company's financial statements to ascertain its revenue, expenses and profits. Next the author iterates each element of the income statement, balance sheet and statement of cash flows and demonstrates how they are used. The paper concludes that the financial statements shows an array of information; however, it does not relate the attitude and opinions of the company's employees, vendors and customers, which also is important information.
From the Paper:"The statement of cash flows shows the company's inflows and outflows of cash and cash receipts. The format of the statement of cash flows is cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Investors and creditors use the statement to predict the amount of cash that will be distributed as dividends or interest. They also use the statement to gauge the risk of investment, assess cash flow prospects, and evaluate the company's liquidity, solvency, and flow of funds."
Sample of Sources Used:
- Cathey, J.M., Clark, M.W., and Schroeder, R.G., (2005). Financial Accounting Theory and Analysis. [University of Phoenix Custom Edition e-text]. Retrieved July 10, 2010, from University of Phoenix, rEsource, ACC49r - Advanced Topics in Accounting Research Course Web site.
Cite this Analytical Essay:
The Basic Elements of Financial Statements (2011, May 25) Retrieved October 02, 2022, from https://www.academon.com/analytical-essay/the-basic-elements-of-financial-statements-147619/
"The Basic Elements of Financial Statements" 25 May 2011. Web. 02 October. 2022. <https://www.academon.com/analytical-essay/the-basic-elements-of-financial-statements-147619/>