Parts of the Financial Statements that the Company Must Own

The financial aspect is the breath of a business, so every company needs a financial report. With this financial report, it can be a source of information about whether or not the financial condition of a company is healthy. The following are the sections of the financial statements that must be present.

Important Components of Financial Statements

1. Cash Flow

Cash flow or commonly referred to as cash flow is one of the important components that are part of the company's financial statements. This cash flow summarizes the movement of money into and out of a business. The elements themselves are investment and funding activities, and operational activities of related companies.

For investment, it relates to the income and expenditure of money related to long-term projects or programs. Meanwhile, funding activities include paying dividends or selling shares. Then the cash flow in the company's operations can be seen through daily activities, such as buying and selling or purchasing business inventory.

2. Income Statement (Income Statement)

The next part of the financial statements is the income statement. From the name alone, you certainly already know the contents of this one financial report. Which is where business owners and stakeholders in the company can find information on whether the business in a certain period is profitable or vice versa.

That way, stakeholders can assess whether the current business performance is good or not. So that later they can make the right business decisions for the future. The income statement itself is divided into two forms of reports, namely single step and multiple step.

The income statement in the form of a single step has a flow and grouping which is considered much easier to understand. This is because the information regarding profit has been explained directly at the beginning of the report. Meanwhile, multiple steps are arranged by distinguishing operational and non-operational transactions. Even so, both can show whether the company is profitable or not.

3. Financial Balance

The financial balance sheet is part of the financial statements that show the ability of a company to pay its debts and obligations, which is seen from the total total assets. The company's financial position in a certain period can be seen through this type of report.
In preparing the balance sheet, it is done by recording the assets, liabilities, and company equity. Share capital can also be seen from this type of balance sheet. Such as premium and disagio shares, issued capital, as well as initial capital owned.

4. Capital Change Report

The financial statements show the amount and source of changes in capital that occur. All increases and decreases that occur in capital in a certain period can be found through this report. You can find out by looking at the ending balance that goes up or down when compared to the beginning balance.

Of course, the information on the statement of changes in capital often correlates with other parts of the financial statements, such as the income statement. The reason is, if the company experiences large profits, it can be concluded that the total capital will increase. And conversely, the amount of capital can be reduced because the company is in a state of loss.

If the company has many investors, the income statement generally also lists the amount of dividends these investors can receive. Some other information that is also listed is initial capital, capital withdrawal, as well as the amount of net profit and loss in the company.

Those are some of the important financial reports for companies to have. In this digital age, the presence of an accounting application will really help your business to create precise and accurate financial reports. Presenting this software is not a difficult matter anymore, please contact https://www.soltius.co.id/id/special-offer/read/accounting-software-akuntansi