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FINANCIAL STATEMENTS, CASH FLOW AND TAXES CORPORATIONS ISSUE TO THEIR STOCKHOLDERS THE ANNUAL REPORT

FIRST TYPE OF INFORMATION, THERE IS VERBAL SECTION, DESCRIBING THE FIRMS OPERATING RESULTS DURING PAST YEAR.

SECOND TYPE OF INFORMATION, THE ANNUAL REPORT REPRESENTS FOUR BASIC FINANCIAL STATEMENTS THE BALANCE SHEET, THE INCOME STATEMENT, THE STATEMENT OF RETAINED EARNINGS AND THE STATEMENT OF CASH FLOW. THE FINANCIAL STATEMENTS REPORT WHAT HAS ACTAULLY HAPPENED TO ASSETS , EARNINGS, AND DIVIDENDS OVER PAST FEW YEARS. THE VERBAL STATEMENTS ATTEMPT TO EXPLAIN WHY THINGS TURNED OUT THE WAY THEY DID.

THE BALANCE SHEET

THE BALANCE SHEET REPRESENTS SNAP SHOT OF ITS FINANCIAL POSITION THE FIRST PART OF BALANCE SHEET LISTS ASSETS, WHICH ARE THINGS THE COMPANY OWNS.

THEY ARE LISTED IN ORDER OF LIQUIDITY.

THE OTHER PART LISTS THE CLAIMS THAT VARIOUS GROUPS HAVE AGAINST THE COMPANYS VALUE, LISTED IN ORDER IN WHICH THEY MUST BE PAID.

STOCK HOLDERS COME LAST IN BALANCE SHEET FOR TWO REASONS FIRST THEIR CLAIM REPRESENTS OWNERSHIP.

SECOND THEY HAVE A RESIDUAL CLAIM IN THE SENSE THAT THEY MAY RECEIVE PAYMENTS.

THE AMOUNTS SHOWN ON THE BALANCE SHEETS ARE CALLED BOOK VALUES. ASSETS CASH, SHORT-TERM INVESTMENTS, ACCOUNTS RECEIVABLE, AND INVENTORIES ARE LISTED AS CURRENT ASSETS. BECAUSE COMPANY IS EXPECTED TO CONVERT THEM INTO CASH WITHIN A YEAR. INVENTORIE SHOW THE DOLLARS COMPANY HAS INVESTED IN RAW MATERIALS. FOR LONG TERM ASSETS IN THE PURCHASE YEAR ACCOUNTANTS SPREAD THE PURCHASE COST OVER THE ASSETSS USEFUL LIFE.

THE AMOUNT THEY CHARGE EACH YEAR IS CALLED THE DEPRECIATION EXPENSE.

LIABILITIES

ACCOUNT PAYABLE, COMPANY PURCHASES SUPPLIES BUT DOES NOT PAY AT ONCE, IT TAKE AN OBLIGATION. NOTE PAYABLES WHEN COMPANY TAKES LOAN THAT MUST BE REPAID WITHIN A YEAR.

ACCRUALS, FIRMS DO NOT PAY WAGES AND TAXES DAILY, THE AMOUNT IT OWES ON THESE ITEMS AT ANY POINT.

LONG TERM BONDS AND SHARES ARE LONG TERM LIABILITIES EQUITY

WHEN COMPANY SELLS SHARES OF STOCK, THE PROCEEDS ARE RECORDED IN THE COMMON STOCK ACCOUNT RETAINED EARNINGS ARE THE CUMULATIVE AMOUNT OF EARNINGS THAT HAVE NOT BEEN PAID OUT AS DIVIDEND. COMMON EQUITY, THE SUM OF COMMON STOCK AND RETAINED RERNINGS.

THE INCOME STATEMENT THE INCOME STATEMENT SHOW ITS FINANCIAL PERFORMANCE OVER EACH OF THE YEAR.(OR LAST TWO YEARS)

SUBTRACTING OPERATING COSTS FROM NET SALES, BUT EXCLUDING DEPRECIATION AND AMORTIZATION, RESULTS IN EBITDA.

STATEMENT OF RETAINED EARNINGS RATAINED EARNINGS REPRESENTS A CLAIM AGAINST ASSETS. NET CASH FLOW MANY FINANCIAL ANALYSTS FOCUS ON NET CASH FLOW.

A BUSINESSS NET CASH FLOW GENERALLY DIFFERS FROM ITS ACCOUNTING PROFIT. BECAUSE SOME REVENUES AND EXPENSES LISTED ON THE INCOME STATEMENT WERE NOT RECEIVED OR PAID IN CASH DURING THE YEAR.

THE STATEMENT OF CASH FLOWS STATEMENT OF CASH FLOWS SUMMARIZES THE CHANGES IN A COMPANYS CASH POSITION THE STATEMENT SEPARATES INTO THREE CATERORIES, PLUS A SUMMARY SECTION. 1. OPERATINTG ACTIVITIES, WHICH INCLUDES NET INCOME , DEPRECIATION, CHANGES IN CURRENT ASSETS AND LIABILITIES OTHER THAN CASH, SHORT TERM INVESTMENTS, AND SHORT- TERM DEBT. 2. INVESTING ACTIVITIES, WHICH INCLUDES INVESTMENTS IN OR SALES OF FIXED ASSETS. 3. FINANCING ACTIVITIES, WHICH INCLUDES RAISING CASH BY SELLING SHORT TERM INVESTMENTS OR BY ISSUING SHORT- TERM DEBT, LONG TERM DEBT, OR STOCK.

1.EARNING PER SHARE= EPS= NET INCOME/ COMMON SHARES OUTSTANDING 2. DIVIDEND PER SHARE = DPS=DIVIDEND PAID TO COMMON STOCKHOLDERS/ COMMON SHARES OUTSTANDING 3. NET CASH FLOW= NET INCOME- NONCASH REVENUES+ NONCASH CHARGES