What financial reports are included in the annual report?  What are the major types of information contained in each of these reports? 

Respond to the following questions thoroughly, in 150-300 words for

The financial reports included in the annual report typically include a balance sheet, income statement, cash flow statement and statement of changes in owner’s equity.

Balance Sheet: The balance sheet provides information about the company’s assets, liabilities and equity as of a particular date. It shows how much money the company has coming in (in the form of revenue and other income sources) compared to what it has going out (in terms of expenses, debt payments and other outgoing payments).

Income Statement: The income statement summarizes revenues, expenses, gains and losses over a period of time such as one year or quarter. It includes revenue from business operations as well as interest income or dividend income if applicable. Expenses may include cost of goods sold, operating expenses (such as salaries and rent), taxes paid and non-operating items such as losses on investments or litigation costs.

Cash Flow Statement: A cash flow statement provides an overview of where cash is coming from and where it is being spent over a particular period. This document shows net cash generated from operations, investing activities such as purchasing fixed assets or making investments in stocks or bonds; financing activities like issuing new shares to investors or taking out loans; among others depending on the size of the company’s operation.

Statement of Changes in Owner’s Equity: The statement outlines any changes that have occurred during an accounting period with respect to ownership interests including contributions by owners/stockholders , distributions to owners/stockholders , sales/purchases/issuances/redemptions etc.. This information is used to calculate net worth which is important for calculating tax liability at year end.