Free US Law Dictionary

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Financial Statements

Working capital management

Cash conversion cycle
Return on capital
Economic value added
Just In Time
Economic order quantity
Discounts and allowances
Factoring (finance)

Capital budgeting

Capital investment decisions
The investment decision
The financing decision

Sections

Managerial finance
Financial accounting
Management accounting
Mergers and acquisitions
Balance sheet analysis
Business plan
Corporate action

Finance series

Financial market
Financial market participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation

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Financial statements (or financial reports) are formal records of a business' financial activities.

In British English, including United Kingdom company law, financial statements are often referred to as accounts, although the term financial statements is also used, particularly by accountants.

Financial statements provide an overview of a business' financial condition in both short and long term. There are four basic financial statements:[1]

Balance sheet: also referred to as statement of financial position or condition, reports on a company's assets, liabilities and net equity as of a given point in time.

Income statement: also referred to as Profit and Loss statement (or a "P&L"), reports on a company's results of operations over a period of time.

Statement of retained earnings: explains the changes in a company's retained earnings over the reporting period.

Statement of cash flows: reports on a company's cash flow activities, particularly its operating, investing and financing activities.

For large corporations, these statements are often complex and may include an extensive set of notes to the financial statements and management discussion and analysis. The notes typically describe each item on the balance sheet, income statement and cash flow statement in further detail. Notes to financial statements are considered an integral part of the financial statements.

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