This document discusses the essential components of financial statements. It explains that financial statements are made up of three primary statements: the balance sheet, income statement, and cash flow statement. The balance sheet outlines a company's assets, liabilities, and equity. The income statement shows revenue, expenses, gains, and losses over a period of time. The cash flow statement displays the inflow and outflow of cash from operating, investing, and financing activities. All of these components together provide important insights into a company's financial performance and health.

1. Essential
Components of
Financial
Statements

2. Financial Statements are the single
most important source of information
needed to make sound business
decisions.

3. REALLY!!?

4. Components of a financial statement
are the building blocks which are used
for constructing financial statements.

5. Financial statements make it easier to
understand the earnings and
expenditure of a business
establishment.

6. The most important Components
of a financial statement are listed
here…

7. 1. Balance Sheet

8. Balance Sheet helps in
keeping track of an
individual’s or business
entity’s finances.

9. The critical components of Balance
Sheet are…
Assets
Liabilities
Equity or Owner’s Equity

10. » Assets
They can be fixed or current assets. Fixed assets
are the ones which remain constant for a very
long period of time such as buildings and land
whereas current assets are ones which can be
readily converted to cash such a securities,
inventory and other short term investments.

11. » Liabilities
These can be debts or legal obligation of a
company which can occur during the business
operations of a company. They are a hindrance
to the growth of the company and can put it at a
disadvantage.

12. » Equity or Owner’s Equity
It is the net value of an asset after deducting
liability. Equity can contain contributions from
shareholders, reserves and retained earnings.

13. 2.Profit and Loss Statement

14. Profit and Loss statement gives a
complete summary of revenue,
expenses and costs incurred by a
company for a given period of time.

15. The different aspects of profit and
loss statement are:
Revenue
Expenses
Gains
Losses

16.  Revenue
The money that comes into a company because
of its business activities during a particular
period of time.

17.  Expenses
The operational costs incurred by a company in
order to earn revenue.

18.  Gains
It’s the increase in the equity of a company
through various transactions except from
owner’s investments or revenues.

19.  Losses
It’s the decrease in equity of a company through
various transactions except from distributions
to owners or expenses.

20. Did You Know?
Another terminology for Profit and Loss is
Income Statement

21. 3. Cash Flow Statement

22. It shows the inflow and outflow of
cash in a firm over a particular
accounting period.

23. The important components of
Cash Flow Statements are..
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities

24. » Cash Flow From Operating
Activities
Operating activities are the production of
goods, sales and finally delivery of the finished
goods.

25. » Cash Flow From Investing
Activities
These include cash flows from assets purchase,
gains and losses from investments and other
transactions of the company.

26. » Cash Flow from Financing
Activities
These include the decisions taken by the
company which help it in raising capital and
most importantly repaying investors.

27. Each and every aspect of the financial
statement is important and provides
valuable insights into the working of the
company.

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of Finance and Accounting
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29. Finance and Accounting Services
provided by Invensis are…
Accounting and Bookkeeping
Tax Preparation Services
Financial Analysis Reporting
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certified company and has served
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31. Invensis’ Finance and Accounting
Services can provide precious insights
about your company which can help
improve its fiscal aspect.

32. To find out more about the services offered and
benefits of partnering with Invensis, please
contact us at sales@invensis.net