Purpose of Financial Statements

Financial statements provide a clear view of a company’s financial position and performance. They are typically prepared at the end of a month, quarter, or year, and are used to:

1. • Evaluate profitability and cash flow
2. • Assess the company’s financial stability
3. • Support business decisions, including loans, investments, or expansion
4. • Comply with regulatory and tax requirements

Types of Financial Statements

There are four fundamental financial statements that businesses rely on for decision-making and reporting:

1. Balance Sheet

Also known as a statement of financial position, the balance sheet provides a snapshot of a business’s financial condition at a specific point in time. It shows:

1. • Assets: What the business owns
2. • Liabilities: What the business owes
3. • Equity: The difference between assets and liabilities

Balance sheets are often used as a starting point for valuing a business and evaluating its financial strength.

2. Income Statement

Also called a profit and loss statement, the income statement shows your business’s revenues and expenses. Subtracting expenses from revenues provides net income, which reflects your profit or loss over a defined period.

3. Cash Flow Statement

The cash flow statement tracks the movement of cash in and out of a business. Unlike the income statement, it only reflects actual cash transactions, including funds received from lenders and investors. This statement helps determine if a business can meet short-term obligations, such as payroll and operational expenses.

4. Statement of Changes in Equity

Also called the statement of retained earnings, this report details how much money the business retains rather than distributing it to shareholders or owners. Retained earnings can be reinvested in the business or used for debt payments, helping to support growth and financial stability.

Why Choose Momentum Accounting CPA Professional Corporation?

Our licensed CPA team provides comprehensive financial statement preparation and review services with a focus on accuracy, compliance, and actionable insights. Key benefits include:

1. • Professional financial statements that meet CRA and accounting standards
2. • Secure remote, virtual, and online services for clients across Canada
3. • Expertise in analyzing financial performance to support strategic business decisions
4. • Local experience in Hamilton and Toronto while serving clients nationwide

Get Professional Financial Statement Support

Accurate financial statements are essential for business success, compliance, and informed decision-making. Momentum Accounting CPA Professional Corporation ensures your financial reporting is precise, timely, and actionable.

📞 Contact us today to schedule a consultation and learn how our team can assist with financial statement preparation, review, and analysis, whether in person or through secure virtual services.