How to Prepare a Financial Report

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How to Prepare a Financial Report

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Agenda Style Begin preparing your financial report by balancing your company's financial holdings. 01 Create a statement of the company's income. 02 Calculate shareholders' equity or earnings per share (EPS). 03 Finish the report with an accounting of the amount of cash the company has brought in or spent. 04

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Begin preparing your financial report by balancing your company's financial holdings. The balance sheets in a financial report provide an overview of what the company currently owns (assets), the amount of debt owed (liabilities) and the profits it has made that will be paid out to shareholders (equity). Use your company's preferred financial report template to organize the information. On this component of your financial report, you can place the assets on the left side of the page or on the top of the page.  Present liabilities and shareholders' ownership in the company on the right side or the bottom of the page.

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Create a statement of the company's income. The statement of comprehensive income, also known as the profit and loss statement, shows how much money your company has earned and the amount of money it has lost during a year . The top line of this statement shows total sales or gross revenue. The lines that follow deduct the gross discounts and returns of products, cost to sale products, operating expenses (including salaries and marketing expenses), and depreciation of items used to produce products such as tools and machinery . After the operations and sales deductions, add income from interest earned on funds. If your company is paying interest on a loan, deduct that amount. Next, deduct income tax . The remaining amount is your bottom line or the actual profits and losses during the specific earnings period.

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Calculate shareholders' equity or earnings per share (EPS ). This section of your financial report is the statement of changes in equity . “To determine the EPS, divide total net income from the income statement by the number of shares currently owned by investors .”

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Finish the report with an accounting of the amount of cash the company has brought in or spent. This information is known as cash flow statements. Create this section of the report by analyzing the figures noted in the assets, liabilities, equity, and income portions of the report When evaluating the circulation of cash in your company include an analysis of all operating, investing and financing activities .

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