The four basic types of corporate financial statements are:
The income statements are also called as the profit loss statements. This statement gives information on the result of various operations of the company over a term period. The balance sheet is also known as the statement of financial condition or position. It gives information on the net equity, assets and liabilities of a company at a given point of time. The statement of cash flow gives information on the cash flow activities of a company. This statement specially covers the fields of investment, operation and financing activities of the company. The statement of retained earnings describes the changes that occur in the retained earnings of a company.
The prime objective of corporate financial statements is to give information on the performance, financial strength and financial position changes of a company. This financial statement is valuable for the users while they go for economic decisions. The major criterion of a financial statement is that it should be relevant, comparable, understandable and reliable. The financial position of a company refers to the reported equity, assets and liabilities while the financial performance of a company refers to the reported income and expenditures of the company. The corporate financial statements are understood by those people who have significant knowledge of Economics and business activities.
