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How to Read a Financial Report

  • 52Weeks
  • 1Step
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A Few Words Before We Begin The following four pages show a sample Balance Sheet, an Income Statement, a Statement of changes in Shareholder’s Equity, and a Statement of Cash Flows. These are the statements we will discuss in the first section. To simplify matters, we did not illustrate the Discussion and Analysis, nor did we present examples of the Executive Letter or Business Review. In our sample statements, we’ve presented two years of financial results on the balance sheet and income statement of and one year of activity on the statement of changes in shareholders’ equity and statement of cash flows. This was also done for ease of illustration. Were we to comply with SEC requirements, we would have had to report the last three years of activity in the Income Statement, Statement of Changes in Shareholders’ Equity, and Statement of Cash Flows. Further SEC requirements that we did not illustrate include a presentation of selected quarterly financial data for the past two years, business segment information for the last three years, a listing of company directors and executive officers, and the market price of the company’s common stock for each quarterly period within the two most recent fiscal years.

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