Question

Please identify the three key types of financial statements that are critical for an engineer manager to understand and interpret?

Answer 1

The three key types of financial statements that are critical for an engineer manager to understand and interpret are :

1. Balance Sheet

Company's balance sheet provides information on financial status of company and what it's worth. The balance sheet represents company's assets, liabilities and shareholders' equity.

The Income Statement

A company's income statement represents the revenue that a company earned over a specific time durations and also the expenses related to earning that revenue. Companies first list gross revenue from product or service sales, and then subtract any money not expected to be collected on specific sales due to returns or sales discounts. This results in the company's net revenue.

The Cash Flow Statement

The cash flow statement represents the flow of cash whether it is inflow or outflow over a specific period of the accounting period. This financial statement focuses on the net increase and decrease in total cash on hand for the accounting period. The cash flow statement includes operating, investment and financing activities.