Marcella Briggs
American Military University
Managerial Analysis
05 September 2014

Abstract
This assignment looks at the different statements that a company would want to ensure is managed carefully and efficiently to give it a clear idea of where it stands financially. These look at how much debt it is incurring, the amount of cash that is brought into the company, and also the amount of cash that is spent. The topics discussed are the purpose of income statements, balance sheets, owners’ equity, and cash flows. These are all very important tools in a company’s portfolio and every company should be paying close attention to these statements as it gives them an idea of where they stand.
Typing Template for APA Papers
Income Statement The purpose of the income statement is to show how profitable a company can be in a specified amount of time. It is a financial statement and it gives a summary of earnings and spending by operating and non-operating undertakings (Income Statement, 2014). It also gives insight as to what the company spends, and to find out if there are any associated debts and assets. An income statement will show gross profit, operating income, income before taxes and net income. Investors will use the income statement to see if they should take on a prospective company. Any profit a company makes must be federal and state taxed. Whatever is left after the taxes are paid is the gross profit. A company’s operating income is the outcome of the day-to-day business functions. This is before interest and income tax come into play and is otherwise known as “earnings before interest and taxes (EBIT)” (Norton, 2014). The net income or the company’s net loss is clearly identified on the income statement when a difference is shown between what was spent and the revenues earned for direct delivery. Balance Sheet A