Financial
Statements
Three primary financial statements are listed below. Analysis of risk,
trends etc. makes
frequent use of ratios. Leverage (the ratio of loans to equity)
increases potential return as well as risk; higher leverage normally
demands higher rates of return. Independent audits are expected to
confirm basic
accuracy of the statements or to call attention to exceptions to
general accounting
principles.
Balance
Sheet (at a point of time: e.g. end of fiscal year)
Assets
Liabilities
Equity
Income
statement (over a period of time: e.g. a fiscal year)
Sales and
other income
- Costs
(including depreciation, interest on debt, etc.)
= Profit
Statement
of cash flows (over
a period of time: e.g. a fiscal year)
Receipts
- Expenditures
= Net cash flow