HOW TO PREPARE A YEAR-END
FINANCIAL REPORT

tells shareholders, government agencies, and
other interested people how your company performed financially during the preceding year. A FINANCIAL YEAR-END REPORT

Summarizes your firm’s assets, liabilities
and net worth Reports your firm’s sources and uses of cash STATEMENT OF CASH FLOW Details your firm’s revenues and expenses INCOME STATEMENT BALANCE SHEET WHAT DOCUMENTS ARE USUALLY NEEDED TO PRODUCE THE REPORT? A B C

Current assets STEP 1: Calculate
assets Investments Property, plans and equipment Intangible assets Other assets BALANCE SHEETA

(accounts payable, taxes, wages, etc.)
(bank loans, bonds payable, etc.) Current liabilities Long-term liabilities A STEP 2: Calculate liabilities BALANCE SHEET

A STEP 3: Calculate company’s
net worth BALANCE SHEET Use these equations ASSETS Liabilities Net worth Assets LiabilitiesNET WORTH

Net sales B STEP 1:
Calculate revenue INCOME STATEMENT Cost of goods sold GROSS PROFIT Costs to make or buy goods Sales figure

General and administrative expenses Employee
compensation Marketing and advertising B STEP 2: Calculate operating expenses INCOME STATEMENT

B STEP 3: Determine net
income INCOME STATEMENT Use this equation Gross profit Operating expenses Net income

Net change to accounts payable
adjustments that pertain to core business activities Depreciation expense Net change to accounts receivable C SECTION 1: Operating expenses STATEMENT OF CASH FLOW

adjustments related to long-term assets
Purchase of new equipment, machinery or fixed assets Proceeds from sale of fixed assets C SECTION 2: Investing activities STATEMENT OF CASH FLOW

Dividends paid Long-term loan repayment
Proceeds from issuance of common stock C SECTION 3: Financing activities STATEMENT OF CASH FLOW adjustments linked to bank debts and stocks

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