1. Balance Sheet. This financial statement gives you detailed information on assets, liabilities and equity of shareholders. Assets are the belongings of the company that have values, including properties (buildings, vehicles, inventories, etc), investment, and even trademarks. On the other hand, liabilities are the sum of money which is owed by the company from the banks. Shareholders’ equity means net worth of the company which belongs to shareholders or the company owners.

This type of financial statement only gives you a broad view on those above mentioned aspects. It does not show you the incoming or outgoing cash.

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2. Income Statement. You can see the amount of revenue during a certain period of time on this financial statement. Income statement will also show you the total expenses you have made during that time. The main goal of this financial statement is actually to inform you how much the company has lost or gained a profit.

However, you can also find a calculation for the amount of money that must be distributed in case you want to share the earnings of the company to the shareholders (commonly called as Earnings Per Share or “EPS”).

3. Cash Flow Statement. The next type of financial statement is cast flow statement. The function of this financial statement is to report the amount of cash generated by the company. This information is important because cash is required for the company to pay many kinds of expenses. By looking at this financial statement, you will also get an idea whether the amount of cash increases or decreases during a specific time length.

There are three activities recorded in the cash flow report, which include operating activities, investing activities, and financing activities.

4. Statement of Shareholders’ Equity. As it was explained above, shareholders’ equity deals with the amount of investment that have been made by the owners or shareholders of the company. Earnings will add the sum of the investment while losses will reduce it. Some companies distribute something called dividends, i.e. the retained earnings of the company which are distributed to the shareholders or owners.

As one type of financial statements, statement of shareholders’ equity reports any change in retained earnings as they are influenced by dividends and income. Hence, the income report is required to make this type of financial statement.

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