Finanical Statements Part 1

In: Business and Management

Submitted By canchaser
Words 1069
Pages 5
Financial Statements Papers Part I
Sherrie Christian
ACC/497
April 8, 2013
Rick Kwan, MBA

Financial Statements Papers Part I
The financial statements are important as they inform the users of the economic health and stability of the entity. Each financial statement provides information to determine economic health, such as financial position, performance, and changes. Assets, liabilities, and equity provide a measurement of financial position. Income and expenses provide a measurement of performance.
The income statement is a vital section of the financial statements, also known as the profit and loss statement. The income statement presents revenue balances, and profits for a specific period of reporting. The income statement presents sales, cost of sales, operating and non-operating expenses, and the income for the prior three reporting periods. The income statement presents awareness of changes or the lack of changes in the sales balances, cost of sales, and operating and non-operating expenses. The income statement provides comparisons of prior reporting periods to current reporting periods. The income statement measures the business performance in terms of revenue, and net income. Managers practice income statement analysis to work out inefficiencies, and processes that are ineffective. Revenue, expenses, and net income are the major parts of the income statement. A financial statement user can view the Home Depot Statement of Earnings for the fiscal year ending February 1, 2009 for net sales is $71,288, which is down $6,061 from the previous year. The Cost of Sales for Home Depot is down from the previous year, from $51,352 to $47,298. The statement shows gross profit as $2,000 down from the previous year. The income statement for Home Depot show operating expenses, earning from continuing operations previous to income taxes, and earnings, and…...

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