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A financial report is one of the more complicated papers to write and prepare for. It gives detailed information on the income, cash flows and balance sheet.

In order to come up with the best report for your directors, managers, investors and analysts, proper steps and preparation should be done and we share them with you below:

Getting Organized

Before you start making the report, you need to select 

the time period. Is this an annual report, quarterly or monthly report? Companies have details regarding this in their articles of incorporation and bylaws. This will give the information on how often financial statements should be prepared.

Asking the advice from superiors can also help because they may prefer a different time period as to what is written in the bylaws.

Once a date is clarified, ledgers should be updated to match the time period chosen.

You now need to get yourself organized by sorting out all receipts by month. Next, you should print out all of your bank and credit card statements. Make sure to attach receipts to a related statement.

All sales and purchases should be put on record. Bank reconciliation should be updated, making sure that all accounts have been processed.

Focus on liabilities that may have been left out including wages that have not been paid and services without any invoice. Record this information in the financial statements.

Preparing The Balance Sheet

A balance sheet includes relevant information on the liabilities, assets and equity accounts. The date and name of the organizations should be included in the title of the balance sheet.

There is a proper format that needs to be followed. The sheet is divided into two parts, one part will have your assets and the other part your equity and liabilities.

The top of your balance sheet should focus on assets. All current assets should be listed here, plus their subtotal. Next to be listed are the non-current assets and their subtotal. A sum of these two parts should be reported as your “Total Assets”.

We now focus on your equity and liabilities. All current liabilities should be listed which may include accounts payable, short-term loans, and accrued liabilities. Come up with a subtotal of current liabilities.

In the next section, long-term liabilities should be listed and subtotaled. These are payable notes and long term debts. Your “Total Liabilities” should contain current and non-current liabilities in summary form.

A list of all equity sources should be prepared showing the amount of money that may remain if all liabilities were paid and all assets sold. Come up with a sum of total equities with liabilities.

The figures in “Total Assets” and “Total Liabilities and Equities” should be equal on the balance sheet. If they are not balanced, review all items listed to find out where the discrepancy occurred.

Preparing The Income Statement

This page would include all information relevant to earnings and costs for a specific time period.

Start by listing all sources of income and the amount of money earned. You can be creative by adding information like data on regional sales or top performing sales teams.

You now need to calculate your “Gross Profit” figures. To do this you must calculate the cost of goods sold. This figure should show the total cost of manufacturing your product or providing your service to customers. Details like labor, materials, shipping and all other added expenses should be taken into account here as well. When you subtract the cost of goods from the total revenue you now have your “Gross Profit”.

Operating expenses should be calculated next and subtract the amount from gross profit. This figure is labelled as “Profit Before Taxes”.

The final part of your income statement should include retained earnings, net losses and income from the day the company started.

Preparing Statement Of Cash Flows

This is your final statement in your financial report. Start by listing the operating activities of the company. The next section should include investing activities that must be in line with the balance sheet. The last part of this section should show the financing activities that are in line with the equity presented in the balance sheet.

The last section “Decrease or Increase of Cash” should be a sum up of all the categories. Notes can be added such as the future outlook for the company, pension plans and best accounting practices

Investing in the Stock Market is a specialized type of work. It’s not for everyone even if wealth could allow one’s hand to dip into this market. If you are new in the stock market business and want to try investing, then you need to know some fundamental principles. Unlike other companies that would allow you to relax and engage in other business activities in a day, investing in the Stock Market needs a 24/7 type of commitment.

Your role as an investor would be to be alert to notification of the changes in the market every minute even if you are engaged in other business concerns. Savvy investors in the stock market have developed a strong sense of awareness of what’s happening in the business every second, minute and hour of the day. The market is primarily a trading market, where buyers and sellers trade on specific stocks.

If you have a sharp view of the stock market business and want to proceed even if you are a neophyte, you will need a ‘partner’ usually a broker who is experienced in this business. Trading is done in an exchange center such as in the New York Stock Exchange, where brokers deal with both buyers and sellers. The amount of money you can place an investment in the stock market will determine the type of broker or financial adviser you will need to guide you in succeeding in the business.

If you want to make the stock market work for you, you need to accomplish some crucial steps in the process and engage with a good broker who can also deal with sellers. This includes finding the right kind of stock for you that can suit your investment budget, and see the appropriate channel where you can put in your funds.

But if you have been in this business for some time and have accumulated some knowledge, the relevant keywords you need to remember to include a sense of proactive alertness of the changes occurring in the market. An investor with a significant amount of investment portfolio, you will need an established financial institution to provide you with a financial plan.

Institutions that can provide a financial plan for stock market investors have an extensive experience in stock market investing such as Wells Fargo or Goldman Sachs. Large banks charge a fee for their services, usually one percent of the assets. If you are well guided by a broker-dealer, you can purchase an IPO just before the price skyrockets.

Should you decide to make a test investment by placing a limited amount of money in the trading market, you can pick the small companies that offer a relatively lower investment for a potentially significant return in the future. The NASDAQ and New York Stock Exchange contain lists of such small-to-medium size companies that accept investments from new investors.

If you want to invest in the stock market outside the United States, you need to know the market exchange culture and rules of the specific country, and the current index used in the daily trading. This includes identifying the price and volume indicators of the particular market.
Whether in the US or other countries an investor should always be guided by an experienced investor or broker-dealer.