Financial statements are a collection of financial information that is compiled and informed as material for recording and financial analysis. Financial statements can be done periodically, namely daily which is accumulated into weeks, months, to years.
Often the business becomes chaotic due to irregular financial statements. In order for business finances to run healthy, it is necessary to manage finances systematically such as:
- Equity is the capital or wealth of a business entity, SME, or others. This equity can be calculated from assets reduced by liabilities. The equity change report contains a report that contains all changes in equity in a given period of time.
- Cash flow statement is a summary of expenses and income in a period such as one month or one year
- The income statement contains information about the difference in income reduced by costs or expenses that must be incurred. The income statement can be a benchmark for making decisions related to return on investment and others.
- The balance sheet, as quoted from the Investopedia.com website, is a financial statement that presents the amount of assets, liabilities (debt), and equity (capital) of the business in a certain period of time. As in the definition above, the balance sheet has three elements, namely assets, liabilities, and capital. Property is wealth owned by a business consisting of current assets, fixed assets, and nonphysical assets (patents, trademarks, and so on).
Source : Jurnal.id, Keuangan UMKM, Katadata
