Types of Financial Statements

For a list of the four basic types of financial statements, click here.

Summary of Financial Statement

The financial statement is used to provide financial information regarding the state of your business, such as how much money your company made or lost during a given period, the value of the company's assets and liabilities and the net worth of your company.

Financial statements can be provided for any period of time such as by month, by quarter, year to date, by year, or as a comparison between years.

A few examples of why a financial statement might be provided and who it would be provided to are:

* Internal purposes so you and any other officers of your company are aware of the state of your business and can make informed business decisions at all times.

* Audits - either an internal audit or a government audit.

* To provide to investors in order to decide whether to invest in your business or to investors who have already invested in your business and would like to be updated on how their investment is performing financially.

* To bank loan officers and vendors who are considering whether or not to give your company a loan or a line of credit.

* If your business is publicly traded on the stock market, any of it's stock holders should be allowed to review the financial statements of your business.

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