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What are these financial statements and what do they mean to the reader? Do the financial statements mean something completely different to an investor, creditor, and employee?
The first of the financial statements is the income statement. The income statement states the revenues and expenses in an understandable way that shows a clear picture of net income or net loss for the organization during a specific period. The main purpose of the income statement is to show how profitable an organization is and where there is room for improvement in that profitability. When one reads the income statement, he or she will see the revenues listed first then the expenses of the organization...
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Common topics in this essay:
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- The statement of financial performance is based on data relating to past transactions and events. Hence the statement of financial performance is of no use to an investor’s decision making process.
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