As EEC's corporate business financial analyst, you will be required to provide the EEC board of directors and executive management team with essential financial information on the management of the...

Financial statements are records that state the condition of the financial activities of a
usiness. Their purpose is to present the financial information of the entity concerned clearly
and concisely as possible for the stakeholders both internal and external. These statements
include Income statements, balance sheet, statements of retained earnings and cash flows.
Balance Sheet:
A balance sheet is also known as a "statement of financial position". It showcases the assets,
liabilities and owners' equity or net worth of any company. The balance sheet is segregated
into two parts that must balance out each other. The main formula on which balance sheet is
ased is: assets = liabilities + shareholders' equity. The equation implies that assets or the
esources used to operate the company are equal to the company's financial obligations along
with the net worth of the equity shareholders. Assets are used by any company to operate
where as liabilities are the two sources who help procure assets. A balance sheet provides a
snapshot of the company's financial position at a particular point in time. It signifies as to the
amount working capital that the company has, which is the difference of the cu
ent assets
and liabilities. It also illustrates how the company uses its capital and the scale of business of
any company. Kunmir states that ‘The balance sheet when used in conjunction with the
income statement and cash flow statement helps to a
ive at the conclusion regarding the
financial performance of any company. It also helps analyse the liquidity, solvency and
financial flexibility of any business.’
Income Statement:
According to Lingesiya ‘It is financial statement that helps measure the financial
performance of any company over a period of time that is usually financial year’. It states the
evenues and expenses that have been incu
ed during the operations from any business. It
provides the net profit that has been earned during any financial year. It helps assess the
operating efficiency of a company. It also states the earning per share which is the measure of
amount the shareholders of the company would receive upon dilution.
Cash Flow Statement:
These statements report the actual movement of cash from different activities of the business
such as operating, financing as well as investing. They report the inflow and outflow of cash
from the business. While an income statement helps us ascertain the net profit, the cash flow
statement helps to assess whether cash has been generated in the financial year by the
usiness. Operating Activities cash...