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iewed as a map, which provides a good direction.

Often financial statements contain a large amount of information. Further the accounting policies, reporting environment, accounting practices are complex and constancy changing. The man can hide or omit key information, create the picture they require. Though the accounting standard limits variability, still financial reporting in different firms and industries has considerable deviations.

The balance sheet is the snap shot of the firm. It is a convenient means of organizing and summarizing what a firm owns and what firm owes and the difference between the two at a given time (Equity). The structure of assets for a firm reflects line of business that the firm is in and also marginal decisions about how much cash and inventory to have and about credit policy, fixed assets acquisition and so on.

Income statement measures a performance over some period of time, usually a quarter, or year. If you think balance sheet as a snap shot, then you can think of the income statement as a video recording covering the period between a before and an after picture.

Information about the cash flows of an enterprise is useful in providing users of financial statements with a basis to assess the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to utilize those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an enterprise to generate cash and cash equivalents and the timing and certainty of their generation.

A cash flow statement, when used in conjunction with the rest of the financial statements, provides information that enables users to evaluate the changes in net assets of an enterprise, its financial structure (including its liquidity and solvency) and its ability to affect the amounts and timing of cash flows in order to adapt to changing circumstances and opportunities. Cash flow information is useful in assessing the ability of the enterprise to generate cash and cash equivalents and enables users to develop models to assess and compare the present value of the future cash flows of different enterprises. It also enhances the comparability of the reporting of operating performance by different enterprises because it eliminates the effects of using different accounting treatments for the same transactions and events.

As discussed in above lenders can evaluates the secure of their lending using g the information reflects on the cash flow statement. On the basis of that, if a company's cash flow statement reflects the well management of their cash and cash equitant that company is in position to raise fund easily from external sources.

Various tools can be used in financial analysis. The derivative financial statements, (Cash flow statement, fond flow statement) Common size financial statement (Common size balance sheet & common size income statement), trend statement and Financial ratio analysis are the most commonly used tolls in financial analysis. These can be used as techniques of analyzing financial information for a more meaningful understanding of the financial position and performance of a firm.

财务报表格式-Formats of financial statements

There are three basic forms of business organizations. Sole proprietorship,