What Financial Statements Will I Need?

The financial statements you will need depend on your specific financial reporting requirements and the nature of your business. However, in most cases, businesses typically prepare the following key financial statements:

Income Statement:

This statement provides a summary of revenues, costs of goods sold (COGS), and expenses over a specific period (usually a month, quarter, or year). It shows whether your business is making a profit or incurring a loss.

Balance Sheet:

The balance sheet provides a snapshot of your business's financial position at a specific point in time. It includes assets (what the company owns), liabilities (what the company owes), and equity (the residual interest of the owners).

Cash Flow Statement:

This statement tracks the inflows and outflows of cash within your business. It is divided into operating, investing, and financing activities to show how cash is generated and used.

Statement of Changes in Equity:

This statement outlines the changes in equity accounts over a specific period. It includes details on common stock, retained earnings, and any other equity accounts.

Notes to the Financial Statements:

These are additional explanations and details to help users better understand the financial statements. They provide context and information about accounting policies, contingencies, and other relevant details.

These financial statements are typically required for external reporting to investors, creditors, regulatory authorities, and other stakeholders. For internal purposes, management might also prepare additional reports or analyses to aid in decision-making.