Financial Health of a Company

The Financial Health of a Company
The financial health of a smart set rests on three very important documents. The income statement, fit shred, and the exchange flow statement. A potential investor will catch at these three documents to determine the wealth of an judicature. In assure for an organization to show their financial condition the company uses a simple equation which is assets= liabilities + owners equity. Both sides of this equation must be equal or balance. Team B will fleet a brief synopsis of the balance sheet, cash flow, and income statements and how that back tooth hinder or protagonist an organization.
Balance Sheets
The balance sheet shows a snap shot of the health of a company. The heart of money a company has the debts and what is left over for stakeholders atomic number 18 all a part of what a potential investor looks into forward to investing. Balance sheets indicate the available assets the company has minus the debts. These debts notify consist of money on contracts, IOUs, and loans. The organization also uses this selective information to evaluate how a company performs against the projections.
Cash Flow
Companies must distinguish their cash flow to ensure there is sufficient cash to meet the operating expenses.



The cash coming into the business has to be more than what is going out for the expenses for the company to make a profit. Cash Flow Statement can be the outgo indicator of the financial health of a business (Bensmn & James, 2011, para. 1).Understanding where the companys revenue is abundant and lacking can help determine which areas of business should continue to invest in or should shut down. The cash flow shows true operational activities of an organization and determines where the money is coming from and going.
Income Statement
Income statement is revenue generated from product sales or provided services before expenses are applied. Increased revenues demonstrates proceeds and the reduced or similar expenses shows that the company is planning and supervise cost...If you want to get a full essay, order it on our website: Orderessay



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