Individual Final Project

You have been named the Chief Financial Officer (CFO) of a two year old company, CUNY Analytics. Financials have been prepared by a bookkeeper. As CFO, you responsible for the preparation of accurate financials, analysis and review of the financials before they are released and communication of the results of your company to banks, investors, creditors and the government, as necessary.

Please complete the following:

a. What are the four major financial statements and, in depth, discuss their purpose.

• Income Statement
Reports revenues and expenses for a specific period of time. A firm's revenues, gains, expenses and losses are listed on the income statement. Revenue is money earned from a company’s normal business operations. The expenses on the income statement are the costs associated with earning the revenue. When a company sells one of its assets, it can experience a capital gain or loss. Revenues minus expenses, plus gains minus losses, equal net income or net loss. The dollar amount of net income listed on the income statement is also found on the cash flow statement under the operating activities section.

• Balance Sheet
The Balance sheet has two main purposes. First, it presents a snapshot at a point in time. Second, it helps to improve understanding, as companies group similar assets and similar liabilities together. The balance sheet reports assets and claims to assets at a specific point in time. It includes the elements of the accounting equation: assets equal liabilities plus shareholders’ equity. It also lists assets first, followed by liabilities and stockholders’ equity. The assets on a balance sheet are classified as either current or fixed assets. Current assets are the most liquid, meaning they easily convert to cash. Fixed assets are long-termed assets. Similar to assets, liabilities are also classified