FINANCIAL

STATEMENT
By: Jeffrey B. Bautista
 OBJECTIVES:
At the end of the lesson, the learner should be able to:
 Define financial statement
 Identify and explain the basic type of financial statement
AS A STUDENT HOW DO YOU
RECORD YOUR SPENDING?
 FINANCIAL
STATEMENT
 The product of financial accounting

 Shows the results of the operation, financial condition,

changes in owner’s equity and sources and uses of cash
 BASIC TYPES OF
FINANCIAL STATEMENT
1. Income Statement

2. Balance Sheet

3. Statement of Changes in Owner’s Equity

4. Statement of Cash Flow

 INCOME STATEMENT

 Also known as the profit and loss statement

 Details the revenues earned and the expenses
incurred by a company.
 BALANCE SHEET

 Also known as the Statement of Financial Position

 Shows the asset, liabilities and owner’s equity of
the business
 It shows the liquidity and solvency of the firm.
 LIQUIDITY

 Refers to the firm’s ability to meet its maturing

obligation in the short run.
 SOLVENCY

 Refers to the firm’s ability to meet maturing

obligation on long run
 STATEMENT OF CHANGES IN
OWNER’S EQUITY

 This reports the changes in the owner’s equity over

a period of time
 Often viewed as the connecting link between
income statement and balance sheet
 STATEMENT OF CASH FLOW

 Also called funds flow statement or the statement

of sources of assets or the statement of sources and
users of funds.
 It is a simple statement of cash receipt and cash
disbursement in a business
 THREE ELEMENTS/ACTIVITIES
UNDER CASHFLOW STATEMENT

 Operating activities- are all operation related earning

activities of the company
 Financing activities- involve in obtaining resources
from owners
 Investing activities- involve all activities related to
non- current assets- disposing of them or selling them
and buying them
Financial statements provide a snapshot of a corporation's financial health, giving
insight into its performance, operations, and cash flow. Financial statements are
essential since they provide information about a company's revenue, expenses,
profitability, and debt.
 ACTIVITY

Enumerate and explain the types of financial statement and its importance in the
business organization.

Criteria
1 point – Does not understand the topic but tries to express ideas
2 points- Does not seem to understand the topic very well
3 points- Shows a good understanding of parts of the topic
4 points- Shows a good understanding of the topic
5 points- Shows a full understanding of the topic.
 PLEASE SEND YOUR ANSWER TO:

Bautista JB

jeffreybayonetobautista@gmail.com

1.
2. jeffreybayonetobautista@yahoo.com