Although a balance sheet is a snapshot of a company's finances at a single moment, the income statement links together several balance sheets and shows a company's financial performance over the period of a month, a quarter, or even several years. The income statement computes all income, subtracts expenses, and shows how much money is left to reinvest in the company. Statement of Changes in Financial Position . The statement, which may encompass several years, shows how much working capital was available during the period under review and how it was spent. Accountant's Report .
Every annual report includes a report from an independent accountant.
The accountant's report usually says that the annual report is a truthful representation of the company's finances. It states that the report was compiled in compliance with generally accepted auditing standards and accounting principles. The accountant will note if the annual report fails to meet one of these standards. Everyone has a different answer. However, everyone will agree that a stock's value is related to its future earnings.