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Financial Statements Introduction:

Accounts usually in the form of records of a company’s financial performance. They provide information about the profitability and financial health of the business. Financial data of a company as a rule of

* profit and loss account
*
Review
* Cash flow statement

A profit and loss account as profit and loss statement shows how to translate a company’s sales or revenues in profits (net income) during a specified period (usually one year). This is a record of how much a company has purchased, paid for the costs and profit or loss.

A balance sheet, which is also known as a financial disclosure statement is a summary of what the company is valued at one point. It summarizes what the company owns (assets), what it is (its liabilities) and net worth (equity or capital). While the profit and loss account is a summary for a specific period (usually one year), the results are summarized in a single time. The balance sheet is a snapshot />
an occupational health management
A cash flow statement is a summary of money entering and leaving a company in a given period (usually one year). It is such a valuable report because he had to explain the strength of the cash flows of a company, that income is not included in the cash-contrast displays.

The importance of the conclusion:

The financial statements are essential tools of the corporate management and investors for analysis and decision making are used. You look at the numbers and create every possible report in an effort to create the story as accurately as possible financiers. Without financial management know-how and investments would simply not possible.

The importance of personal financial statements:

Everyone knows the financial reports produced by this company, but it is not so well known that you can produce your own accounts. Your own tax return and balance sheet, that tells its own financial performance, as the financial statements of a company.

Management companies know that it would be impossible, a company with no financial reports with information on their financial strength, productivity, goal setting and so on run. Is it logical that less you need to see your own financial reports on how well you do financially, how to run a company?

Their accounts you will say your financial strength. They will tell you if you fall into the poor, middle class or rich. current statements to be compared to earlier statements in order to create a trend, a story over time. You can also use your financial statements for the scenario analysis as he looks at the impact of an investment in your financial situation or the impact of rising interest rates.

Your statement of income:

Income statements along the following structure: income – expenses – taxes = net profit (as profit)

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Rather than simply list your income and expenses by category, it is useful to classify them in a way that will help you know when the profile of income and expenses of a poor, middle class or rich person. The Internal Revenue Service (IRS) United States classifies all income and losses in three categories. Assets, liabilities and portfolio

In short, the earnings from income from your wages, salaries, fees, commissions, and individual companies.

Passive income is income that most participate regularly by a person that is not essential to have received as the object, royalties and patent license agreements, and companies that you own.

Portfolio investment income from investments in securities such as stocks, bonds, mutual funds, as interest income or dividends or capital gains (or losses) from sales.

Likewise, the costs to spend with your business income is active, and so on for your expenses and liabilities to your portfolio and passive income portfolio. Their income is usually not tax deductible while your passive spending and portfolio are tax deductible. We are referring to active income as fees and costs incurred losses and expenses, good passive portfolio.

Profit and loss account:

Sales (Completed)

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Active
- Passive
- Portfolio />
Fees
Deductible expenses

- Passive
- Portfolio />
Non-deductible expenses
Net income />
Personal assessment:
Resembles the structure:. Assets = liabilities + equity or equity (or net worth) = assets – liabilities

Just like your personal income tax, it is useful to know your personal balance sheet in a manner so that if you will have to categorize assets and debt profile of the poor, middle class or rich person. The assets and liabilities can be divided into good and bad assets and liabilities.

The assets are good investments. In short, they put money in your bank account. Good debt is debt, to buy good quality assets, the cost of debt (interest) makes tax-deductible.

Bad assets refer to anything else. They take money from your bank account. They cost you money for their own. Bad debts are debts now that makes for bad assets, which is the cost of debt is not tax deductible.

Just like your personal tax return, your good assets and good as a passive or portfolio will be classified accordingly. There are no active or passive means, such as income is your salary, so there is no active or passive.

Rating:

Active
Good assets

- Passive
- Portfolio />
Bad assets

liabilities
Good assets

- Passive
- Portfolio />
Bad assets
Net Worth />
Poor, middle class and wealthy:

The composition of your income, expenses, assets and liabilities and how they interact is a story of your story Financial. By filling in your accounts, you can tell what class you are, and

The poor, rich middle class and each has a different history, different financial make-up, which is reflected in their accounts. Financial statements of each class is unique. You do not have a
poor or middle class in search of accounts and be rich.
to get rich, you need to understand your financial statements and create a plan to change it so it looks like a rich person.

The poor earn only limited active and passive income or no income portfolio. They have little or no assets in good or bad assets.

The middle class deserves the most active, and something like a passive income or portfolio. They have little in the way of quality of assets and liabilities of non-performing assets, and little good debt and bad debt expenses.

In contrast, the rich earn income mainly passive and portfolio and little in the way if the work income. You have many good facilities, provide passive income portfolio, and some bad assets (relative to their wealth). The rich have many good debt (at least while they accumulate their wealth) and little or no bad debt (relative to their assets).

What is the meaning of your personal balance sheet? The poor, middle class, rich or a combination?