Financial statements are periodically by the companies issued reports that provide the most important financial information about company’s financial condition and success of activity.
There are three main financial statements:
- Income statement gives information about such financial indicators as revenue, gross income, operating income, net income and other financial data that is related to company’s income and expenses over some period.
- Balance sheet provides information about such financial indicators as debt, receivables, equity, assets and other main financial data that expose company’s financial health at some moment.
- Cash flow statement is a statement that exposes flows of cash payments to the company and from the company over some period.
Key parameters of financial statement
The main parameter of every financial statement is a period or date. For balance sheet date is one day (and date of previous period) for which numbers are exposed while for income statement or cash flow statement some period has to be indicated. Such period is from one quarter (3 months) to one year depending of the quarter of report issuance date.
Fiscal period usually coincides with calendar year for most companies. However, some cyclical companies chose to use other fiscal period other than calendar year because their balance sheet looks better at non-standard date.
Financial statements can be consolidated or not. If financial statement doesn’t say anything about that, it should be not consolidated. Consolidated means financial data includes not only the main (parent) company’s results but also all subsidiaries that are controlled by the company. For calculation of valuation multiples normally consolidated data should be used.
Also financial statement always has to indicate amounts of the numbers and currency. For example, ‘000 EUR should mean that all the numbers are expressed in thousands of euro. Usually numbers in financial statements are in thousands or millions.
Where to find financial statements?
It is easy to find financial statements if company’s stocks are listed in some stock exchange. In such case financial statement are provided in website of the company or in website of the stock exchange under the names as SEC filings, financials reports, financial statements or annual reports.
If company is not listed then financial statements are much harder to get. Depending on the country such information might be available to buy from corporate registry, credit-info or similar agencies. If company is large main numbers could be disclosed by media.