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Business
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| Number of pages / Number of words: |
5 / 1190 |
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This report will show Connie how much money she is making from her sales each month. She can use this information to determine whether her prices are accurate, and to determine whether the costs of goods sold is too high or too low in comparison. This number will also directly affect the Statement of Changes in Owner's Equity, as Connie's equity will be increased by the net income, and decreased by any withdrawal she makes...
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The remaining balance after those two factors, called retained earnings, is added to the previous Owner's equity to get the current amount.
The Statement of Cash Flows is a report that will enable Connie to determine whether she is gaining or losing actual cash from the business. This is vital, especially in a business of Connie's size, because no matter how strong the balance sheet, without cash, there is no way to transact for supplies and equipment necessary to fill the orders...
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