The Balance Sheet, The Statement of Operations, The Statement of Changes in Net Assets, or the Statement of Cash Flows. In your own words, explain what important information it provides and why it is necessary. Refer to your chosen topic and reference its relevance. Lastly, can you think of some important information not included on your chosen statement? Why do you think the other financial statements are needed?

Scenario

The Balance Sheet

The balance sheet of a for-profit company showcases the company’s assets, liabilities, and stockholders’ equity. In a not-for-profit company, the balance sheet will show a company’s assets, liabilities, and net assets. The balance sheet is basically a snapshot of how a company looks at a certain time, typically at the end of a fiscal year. An equation to keep in mind within the balance sheet is:

Assets = Liabilities + Shareholders Equity (or Net Assets)

The Statement of Cash Flows

The Statement of Cash Flows depicts how the company earned cash and where it went over the year. The Statement of Cash Flows is divided into the following sections:

• Cash flows from operating activities
• Cash flows from investing activities
• Cash flows from financing activities
• Net increase (or decrease) in cash and cash equivalents

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