3. Financial Statements

To be useful, information must be understandable. Having that in mind it is fair to say that the financial statements are the main output of the accounting procedures. Each report has it own purpose, interpretation and presentation guidelines. The most common financial statements disclosed are:

This manual focus on the income statement and on the balance sheet and not on the Cash Flow statement and the statement of changes in equity.

Do not mistake the cash flow statement which is an accounting report with the calculation of free cash flows, which is a financial concept presented in the financial analysis manual. The first is meant to present all the changes in cash flows of a given company. The later reflects the cash flows that the company makes available to the capital holders.