The structure of the Trial Balance contains assets (holding company), liabilities (obligations to third parties), and capital (participation of the owners or shareholders). You can determine the state of liquidity (cash available in the near future after deducting financial commitments for the period), solvency (availability of long-term cash to meet obligations when due), and profitability of assets and capital.
The financial statements provide information on the financial position, changes and the operation of the company. On the other hand, the income statement presents information on the development of the company, and measure the operation of the same through the generation of profits or income. The main elements for such measurement is revenue and costs or expenses, through which it determines the company’s ability to generate cash flows and measure the effectiveness with which you can use. Similarly we can evaluate the administration, their responsibility and have evidence for making decisions, whether to keep or sell their investment and confirm or replace management.
The Statement of Changes in Equity, for its part, shows the movements that have occurred during a period, in the balance sheet as capital or contributions from the owners or shareholders, and also shows recorded in retained earnings outstanding capital stock or distribute and reflects the distribution of dividends available to shareholders is no profit sharing in order to strengthen their business. In Cash Flow provides information on the ability to generate cash flow from operations, investing activities and financing, and through these we can analyze a company’s ability to pay its commitments. salaries, supplier’s creditors and dividends to its owners. It also is a tool for determining funding needs.
Notes to Financial Statements on the other hand, are further information on general information about the company, the accounting policies adopted, clarification of the risks, uncertainties and changes in prices affecting the company and other resources and obligations not recognized in the Balance Sheet, also contains references to financial data of the country.