For that reason, the balance sheet from the preceding year is usually provided. The Income Statement presents revenues less associated expenses and the resulting net income. The Statement of Cash Flows provides information about the sources and uses of cash.
Liabilities increase or decrease as obligations are incurred or liquidated.
Equity increases or decreases primarily as a result of income or loss from operations of the business. It also increases when the owners contribute capital to the business, and decreases when the capital is withdrawn or dividends are paid. Investing activities include the purchase of plant, property and equipment or the proceeds from the disposition thereof, and also certain investments in securities or other non-operating assets. Financing activities include the borrowing and repayment of debt, as well as the contribution and redemption of equity capital and the payment of dividends on the capital. In addition to the basic financial statements, most financial reports done by Certified Public Accountant will have a section of Notes to the Financial Statements.