1. KIMBWETA
FINANCIAL STATEMENT

2. FINANCIAL STATEMENTS
Are reports prepared by a company’s management to present the financial performance and position at a point in time.
Also are written reports which quantitatively describe the financial health of the company.
The aim of financial statements is to give users more information about the company (performance and position)
Also are the main sources of information for most decision makers.

3. TYPES OF FINANCIAL STATEMENTS
Comprehensive income statement (trading, profit and loss account)
Statement of financial position (balance sheet)
Statement of owners equity
Statement of cash flow.
Always financial statement are prepared annually or quarterly.

4. USERS OF FINANCIAL STATEMENTS
Shareholders
Government agencies
Banks and creditors
Investors
Management and employees
Public and customers
Now let see on how to prepare the financial statements;

5. COMPREHENCIVE INCOME STATEMENT
This is used to calculate profit or loss of the company. Also the income statement shows the revenue and expenditure of the company over a period of time.
*TERMS
GROSS PROFIT = sales-cost of goods sold(COGS)
COST OF GOODS SOLD=cost of goods available for sale (COGAS)-closing stock
COGAS=opening stock+purchases+carriage in wards-returns outwards
NET PROFIRT = gross profit+any other income-expenses
FORMAT OF COMPREHENCIVE INCOME STATEMENT

7. NOTE 1
This note represents all kind of expenses like;
Carriage outwards
Advertising
Sundry expenses
Depreciation
Provision for bad debts
Discount allowed
Electricity charges. And any other expenses of the company

8. STATEMENT OF FINANCIAL POSITION
statement of financial position/ balance sheet; refers to the statement showing the list of assets, capital and liabilities of a company for a specific period of time.
In the balance sheet the equation used is that of: A=C+L where
A= assets
C= capital
L= liabilities

9. ASSETS CURENT ASSETS This includes Cash Bank Stock Debtors
And any other asset that stay for a short period of time.
NON-CURRENT ASSETS
Land & buildings
Motor vehicle
Machines
Furniture & fitting
And any other asset that can stay for long usually one year

10. CAPITAL & LIABILITIES CAPITAL
refers to money or goods used for starting a business.
when there is no liabilities in a business, ASSETS=CAPITAL
LIABILITIES
NON-CURRENT LIABILITIES;
Loan from NBC
Debentures
CURRENT LIABILITIES
Creditors
Bank overdraft

11. Statement of financial position is used to show the position of the business while statement of comprehensive income is used to show the performance of the business
FORMAT FOR STATEMENT OF FINANCIAL POSITION

13. FINANCIAL STATEMENTS
Drawings; are money or goods taken out of the business by proprietor for personal uses.
Debenture; this is the document that shows the long terms obligation of the company.
Note
Depreciation are deducted from the assets in the balance sheet
Provision for bad debts also are deducted from the amount of debtors in the balance sheet

14. THANKS
MAY LORD BE WIH YOU

15. SOLVED EXAMPLE
KIMBWETA
FINANCIAL STA TEMENTS

21. THANK YOU
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