Corporate Financial Statements
Corporate financial statements should be prepared in a comprehensive manner and offer the opportunity to compare related data. Assets, equities and liabilities, which are accounted for, manifests a corporate body's financial condition. Expenditure and income, which are reported, reveal as to how a company is performing. Corporate financial statements are regarded as an invaluable tool to keep track of the various business dealings of a company.
Prior to going into detail about corporate financial statements, it is important to distinguish between the two types of corporations:
- Public corporation
- Private corporation
They sell their shares in the market for the general public. These shares are traded on stock exchanges like NYSE and NASDAQ. Just because the public corporations sell shares to the public, they have to keep an account of the money.
They do not trade their shares publicly. They are not made available on the stock exchange. These shares are usually owned by an individual. It is not obligatory for these corporations to furnish financial statements.
The corporate financial statements are usually audited. They are prepared by certified public accountants or CPAs. The financial statements are made as per GAAP or generally accepted accounting principles guidelines.
Types of Corporate Financial Statements:
The corporate financial statements are primarily of the following types:
- Income statements
- Cash flow statements or statements of cash flow
- Balance sheet
- Balance sheet: The balance sheet of corporate financial statements include assets. Assets include accounts receivables- amount of money, the company is entitled to get back, stock of raw materials and stock of finished products. Liabilities include debts of the company, accounts payable, money, which the corporate body has to pay to investors.
- Cash flow statement: is the statement, which indicates all the business transactions of a corporate body. It records all outgoing as well as incoming business dealings.
- Income statements: registers profits earned by a corporate body or loss borne by a company.
Corporate financial statements can be easily accessed on the world wide web in a company's web portal. One can also get hold of a business paper or journal furnishing information about the corporate bodies.