Introduction to

Financial Statements
 Financial Management Cycle
Documenting Past
Performance
Income Statement
Balance Sheet
Statement of Cash Flow

Predicting Future Analyzing Past

Performance Performance
Ratio Analysis
Budget
Trend Analysis
What are Financial Statements?

Formal record of the

financial activities of a
business, person or
entity, where relevant
information is presented
in a structured manner
that is easy to
understand
What are Financial Statements?

Meant to present the

information in question
as clearly and concisely
as possible for all users
What are Financial Statements?
Balance
Sheet/Statement of
Financial Position
Income
Statement/Statement
of Operations
Statement of Cash
Flows
Schedules and Notes
Income Statement

Statement of
Operations of the
cooperative
Contains the
revenues and
expenses for the
given period
Lists the temporary
accounts
Income Statement

Result of operation is
carried forward to the
balance sheet as
GRF, CETF, OPTION
FUND, CDF and
DIVIDENDS/PATRO
NAGE REFUND
PAYABLE
 COOP MULTI PURPOSE COOP
Income Statement
December 31, 2012

Sales 32,200.00
Less:
Inv, beg 25,000.00
Purchases 15,000.00
40,000.00
Less: Inv, end 13,050.00
Cost of Goods Sold 26,950.00
Gross Profit 5,250.00
Add:
Other Income 3,920.00
Gross Income 9,170.00
Less:
Office supplies 2,000.00
Travel and transportation 400.00
Honorarium 3,350.00
General assy expenses 500.00
Repairs 200.00
Aff. Fees 250.00
Doubtful accounts expense 1,750.00
Rent expense 12,000.00
Depreciation 1,100.00 21,550.00
Net Loss (12,380.00)
Balance Sheet

Statement of
Financial Position as
of a given date
Contains the Assets,
Liabilities and Equity
of the cooperative
Lists the permanent
accounts
Balance Sheet

ASSET=LIABILITIES
+ OWNERS EQUITY
Contains the
summary result of the
Income Statement
 Balance Sheet
December 31, 2012

Assets
Cash in bank 24,420.00
Petty cash fund 1,000.00
Cash advances 500.00
Loans receivable - current 25,000.00
Loans receivable - past due 5,000.00
Allowance for doubtful accounts 1,750.00 3,250.00
Merchandise inventory 13,050.00
Short term investment 1,000.00
Furniture, fixture and office equipment 6,000.00
Accumulated depreciation 1,100.00 4,900.00
Total assets 73,120.00
Liabilities
Savings deposit 20,000.00
Other payable 6,000.00
Rent payable 8,000.00
Total liabilities 34,000.00
Equity
Share capital 1,500.00
Donations and grants 50,000.00
General reserve fund (12,380.00)
Total equity 39,120.00

Total liabilities and equity 73,120.00

Cash Flows

Contains the inflows

and outflows of cash
of the cooperative
 (1)
Interrelationships
BALANCE INCOME
SHEET STATEMENT

P Assets
+

- Cash Exp & Non-Cash:

Depreciation/ Bad Debts
Total

F
Revenues
Liabilities

C
+ Total
Equity
Operating
Expenses
+

C
Reserves

Surplus Net Sur-

Net Surplus

O
+
Plus
(Loss) (Loss)
 (2)
INTERRELATIONSHIPS
BALANCE INCOME
SHEET STATEMENT

P
Inc. Assets

Assets
Dec. Assets
Total

F
Revenues
Inc. Liabilities
Liabilities

C
Total
Equity
Operating
Expenses

C
Reserves

Net Sur-
Net Surplus

O
Plus
(Loss) (Loss)
 Financial Management Cycle
Documenting Past
Performance
Income Statement
Balance Sheet
Statement of Cash Flow

Predicting Future Analyzing Past

Performance Performance
Ratio Analysis
Budget
Trend Analysis
ANY QUESTIONS?
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0905 636 6853