A financial statement is a picture of a company’s financial health for a given period of time. The statements provide a collection of data about a company’s financial performance, its current conditions and its cash flows. Hence, they usually include:
- Balance sheets – a list of the company’s assets, liabilities and equity ownership.
- Income statements – a tally of the company’s operational performance.
- Statement of cash flows – list the various changes to the cash account during the accounting period. It also reconciles net income or loss to changes in cash.
- Explanatory notes – provide more detail about various line items in the financial statement, such as inventory methods used, contingent liabilities, and owner’s equity.
The RPB Difference
All financial statements prepared by Reilly, Penner & Benton (RPB) are in conformity with General Accepted Accounting Principles (GAAP) unless another form of accounting is requested. What’s more, you’ll experience a peace of mind afforded only to clients of a CPA firm with 100+ years of practice.
From a simple business loan application to a complex financial report prior to a sale or merger, Reilly, Penner & Benton (RPB) can help put together the necessary statements you need quickly and efficiently.
Why is Accurate Financial Statement Preparation Important?
Financial statement preparation is the most important step in accounting because it represents the purpose of financial accounting. For this reason:
- They tell you the performance and the value (sort of) of your company.
- They are what others are using to measure your company.
- Financial statements and other tools help you manage your company when you can no longer be hands on with all the details.
Timely, accurate and understandable financial statements are necessary to gauge how well your business has performed and to assess the strength of its financial position. They are the foundation upon which you make important business decisions.