Financial Statements - The Basics
Profit / Loss (P&Ls)
The profit and loss (P&L) statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, (month, quarter, etc). These records provide information about a company's ability or inability to generate profit by increasing revenue, reducing costs, or both.
A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure.
The income statement shows a company's expense, income, gains, and losses, which can be put into a mathematical equation to arrive at the net profit or loss for that time period. This information helps you make timely decisions to make sure that your business is on a good financial footing.
Cash Flow Statement
A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. ... The main components of the cash flow statement are cash from operating activities, cash from investing activities, and cash from financing activities.