1, balance sheet
The balance sheet is a report that reflects the financial situation of the company on a specific date. The balance sheet is listed by assets, liabilities and shareholders' equity (also called owners' equity).
Assets are resources formed by past transactions of the company and owned or controlled by the company. On the balance sheet, it is listed separately according to the liquidity of assets, including current assets, long-term investments, fixed assets, intangible assets and other assets.
Liabilities are the current obligations formed by the company's past transactions, and the performance of this obligation is expected to lead to the outflow of economic benefits from the company. On the balance sheet, liabilities should be listed according to their liquidity classification, including current liabilities and long-term liabilities.
Shareholders' equity is the economic benefits enjoyed by shareholders in the company's assets, and its amount is the balance of assets MINUS liabilities. On the balance sheet, the owner's equity shall be itemized according to paid-in capital (or share capital), capital reserve, surplus reserve and undistributed profit.
Through the balance sheet, we can understand the company's capital structure, asset composition, liabilities and solvency, shareholders' equity, asset operation ability and other important economic information.
2. Income statement
The income statement, also known as the income statement, is a statement that reflects the company's operating results in a certain accounting period. The income statement shall be itemized by income, expenses and profits.
Through the income statement, we can analyze the company's operating ability.