Financial Statements Essay

Moreover, it shows the debt that the company owes to others (liabilities) such as bank loans and salaries. Liabilities may be current in that the company intends to settle them within the financial year or long-term in that they can be settled later on, past the financial year in question. A balance sheet also shows the amount that would remain in the event that the company sold its assets and paid off all its debt. This amount is referred to as shareholders’ equity. An income statement is a financial statement which indicates the revenue (profit or loss) accruing to an enterprise over a particular time period. The fourth and final type of financial statements is the statement of shareholder’s equity which shows the interest that the investors have in the company over a period of time.