Financial Statements

Income statement profit loss statement. Cash flow statement. The value of a firm depends on. The statement of cash flow.

A firm’s financial statements typically are a part of the annual report that the firm sends to its shareholders.

Annual report, containing financial statements and other information, is prepared by management to shareholders annually.

An income statement can be divided into sections. The operating section shows the operations of firm in terms of its sales and expenses, while the non-operating section shows such items as interest expenses.

Net income (net profit) is the profit of the shareholders. It can be divided into 2 parts:

We need to evaluate the firm’s net income or net profit and consider its cash flow, provided by continuing operations.