Financial Reporting

Types of financial reports

At Simply ALT, we compile the primary records of a company's financial activities by documenting the Balance Sheet, Income statement, Cash flow statement, and statements of shareholder equity. While most companies base their financial data on three key statements, they sometimes include the statement of shareholder equity.

Balance Sheet

A Balance Sheet records the total assets, liabilities, and equity currently held by the company. It provides a quick overview of the total assets after deducting equity and liabilities. Generally, businesses track balance sheets on a quarterly basis, and when creating yearly reports, they collect data from balance sheets. The Balance Sheet serves as a real-time assessment of current asset liquidity and debt coverage, and it mainly outlines the following:

• Liquid assets, including cash, certificates of deposit, short-term securities, and treasury bills

• Current assets, such as accounts receivable, inventory, fixed assets, and prepaid expenses

• Current liabilities, including short-term and long-term debt, accounts payable, payable wages and dividends, tax expenses, and prepayments from clients

• Shareholder and owner equity values, such as retained income, receivable dividends, capital gains, and stocks

Income Statement

Unlike the Balance Sheet, an income statement tracks the financial activities of a business over a longer time period. Many businesses monitor income statements on a quarterly basis to track financial processes throughout the year. An income statement reflects the performance for revenue, net income, expenses, and earnings per capital share, particularly for companies that have shares listed on the stock exchange. The income statement also indicates the profit and loss of the company. The other elements included in an income statement are:

• Operating revenue, essential for selling products or services

• Net and gross revenues, encompassing total sales revenue and remaining revenue after deducting costs

• Non-operating revenue from accrued interest, investment returns, royalty payments, and capital gains

• Primary expenses, including cost of goods sold (COGS), depreciation, and selling, general, and administrative costs (SG&A)

• Secondary expenses, such as debt or loan interest, asset loss, and capital loss