It is undeniably essential for professionals to have a template that will allow them to work efficiently in whatever fields they belong to. And this makes Excel still indispensable despite the emergence of various million dollar software. It is especially useful for accountants and CFO’s as it caters Excel templates for financial statements.
What is a Financial Statement?
Financial statements comprise records of the financial position and activities of a business or entity. It is presented in a structured manner in which it can be easily understood. Every business entity needs to have a financial statement that will support its operations and statutory requirements.
Types of Financial Statement
The financial information is conveyed through the income statement, balance sheet, cash flows, and equity statement.
The income statement summarizes the outcome of the entity’s operation in a specified period. It includes revenue; cost of sales or services, operating expenses, and taxes. It also measures the entity’s effectiveness in achieving the targeted profit.
The balance sheet captures the business’s financial position at the end of a specified period. It breaks down what the company owns that can be converted into cash. The balance sheet is arranged in order of liquidity that is how assets can be converted into cash quickly. The other balance sheet section indicates how much the liabilities are and the amount of money the investors put into the business. It measures how efficiently the entity uses its assets to generate revenue.
Statement of Cash Flows
Cash is the lifeblood of every business. The cash flow statement effectively captures the amount of cash inflows and outflows. It measures how well the entity manages its cash position and how it produces cash to pay financial obligations and fund its operational activities. The core component of cash flow statements are operating, investing, and financing activities.
Statement of Changes in Equity
Statement of Changes in Equity shows the detailed movement of reserves that comprises equity over a given period.
Building Financial Statement in Excel Template
Building an Excel template for financial statements is quite simple and straightforward. One of the best attribute of excel is its capability of inter linkages among different sheets, which means a change in one sheet will automatically change the whole report. Thus, making it easier for the accountants to work on it.
Conclusion: Financial Statement best works in Excel
The financial statement summarized thousands of financial information and transformed it into a comprehensive four statement report that could work efficiently using excel formulas. The best part is that it could easily pull out and link each amount’s composition in the financial statement.