Business Consulting for Small & Midsize Companies

T h e B a l a n c e S h e e t a n d I n c o m e S t a t e m e n t s - - A k e y F i n a n c i a l T o o l f o r B u s i n e s s O w n e r s a n d I n v e s t o r s
In the context of a financial reporting, the balance sheet is a key component of the financial statements and may be described as a consolidated summary of the company’s financial condition at a point in time. The other three supporting statements that complement the balance sheet are the income and expense statement, the retained earnings statement and the statement of cash flows.
These four statements combined, form the nucleus of the financial report. The financial statements start with the income and expense statement and generate the net income figures. The net income figure is needed to complete the retained earnings statement, where net income is added to previously retained earnings less dividend payout to arrive at the end of the current business cycle’s sum total of retained earnings. The end of the current fiscal cycle’s retained earnings is needed to complete... Read more: http://thinkandprofit.net/Balance%20sheet%20and%20income%20statements%20%20by%20Trevor%20G%20McKenzie.pdf