financial reports

enable a business to analyse past performance and plan for future requirements. - Budget - balance sheet - Profit and loss statement

Balance sheet

indicates the financial position of the business at a point in time (reflects financial stability). - assets - liabilities -equity

Assets

an item owned by the business for use within the business (cash at bank, property, equipment, land)

Liabilities

An amount owed by the business to other entities. - an obligation that requires an outflow or resources

Equity

The remaining share of the business when liabilities have been deducted from assets (profit, (loss)).

Budget

A financial plan that outlines expected revenues and expenditures - assists in planning for the future -budgeted balance sheet: shows changes in assets, liabilities, and equity - budgeted p/l statement: shows the income/expenses and profit/loss - budgeted cash flow statement: shows the cash inflows and outflows

Profit and loss statement

indicates the financial performance of the business over a period of time. - summarises the company's revenues and expenses