Warning

Info

Warning

Info

Warning

Info

LSDefine

Simple English definitions for legal terms

financial statements

Read a random definition: risk of nonpersuasion

A quick definition of financial statements:

Financial statements are reports that show how much money a business has and how much it has spent during a certain time period, usually a year. There are three main reports in financial statements: the balance sheet, income statement, and cash flow statement. These reports help people understand how well a business is doing financially. Big companies may also have extra notes and get checked by an outside person to make sure everything is correct. Financial statements follow rules called Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).

A more thorough explanation:

Financial statements are reports that provide information about the financial position and performance of a business during a specific period, usually a year. They summarize financial and accounting information and help investors, creditors, and other stakeholders make informed decisions about the company.

The three main types of financial statements are:

  • Balance Sheet: This statement shows the company's assets, liabilities, and equity at a specific point in time. It provides a snapshot of the company's financial position.
  • Income Statement: This statement shows the company's revenues, expenses, and net income or loss over a specific period. It provides a summary of the company's financial performance.
  • Cash Flow Statement: This statement shows the company's cash inflows and outflows over a specific period. It provides information about the company's liquidity and ability to meet its financial obligations.

Financial statements may also include a statement of changes in equity, which shows how the company's equity has changed over a specific period.

Financial statements are important because they provide valuable information to investors, creditors, and other stakeholders. They help these parties make informed decisions about the company, such as whether to invest in it or extend credit to it.

For example, if a company's income statement shows that it has been consistently profitable over the past few years, investors may be more likely to invest in the company. On the other hand, if a company's balance sheet shows that it has a large amount of debt, creditors may be hesitant to extend credit to the company.

Financial statements are also important for regulatory purposes. Publicly traded companies are required to file financial statements with the Securities and Exchange Commission (SEC) on a regular basis. These statements must be prepared in accordance with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).

Financial statements are essential tools for understanding a company's financial position and performance. They provide valuable information to investors, creditors, and other stakeholders, and help ensure transparency and accountability in the business world.

financial instrument | finder's fee

Warning

Info

General

General chat about the legal profession.
main_chatroom
👍 Chat vibe: 0 👎
Help us make LSD better!
Tell us what's important to you
15:30
fucking seriously dude we're readinf 1l of a ride
oh im reading that on my own
i feel like yall should read a fun book
NosyBeagle
15:34
can't join ur discord yet. im a next cycle baby
NosyBeagle
15:34
or an OF model if this shit doesn't start clicking
15:41
ive been banned from too many discords
15:42
you dont want me there
15:46
i want u there nemo
NosyBeagle
16:04
discord has been fine for me. i go nuts on twitter tho
16:08
I miss pre-Elon twitter
real
you go to twitter replies and it's all blue checks and bots now it's fugly
i just have a burner twitter for political updates
it's a cesspool
16:34
was twitter ever good
much better than it is now
16:34
i had it in 2015 and it was already ultra political rage bait
16:34
ok ya fair
nothing will top 2014 tumblr for me though
16:36
yo fr
16:36
2014 tumblr eating disorder core
there used to be a two-story american apparel in chicago and all the employees were beautiful and cool and here comes 13 year old me thinking i was just like them because i wore the same clothes
you are beautiful and cool tho
no YOU'RE BEAUTIFUL AND COOL!!!!!
it was like the hipster mecca
16:44
Tumblr ands its consequences have been a disaster for the human race
im glad i got over my tumblr politics phase in high school
Some people never grow out of it
NosyBeagle
18:45
ok my shift is over. byebye lawyers <3
LSD+ is ad-free, with DMs, discounts, case briefs & more.