{"id":9989,"date":"2023-02-13T16:24:25","date_gmt":"2023-02-13T10:54:25","guid":{"rendered":"https:\/\/www.tickertape.in\/glossary\/?p=9989"},"modified":"2023-02-13T16:27:22","modified_gmt":"2023-02-13T10:57:22","slug":"financial-statements","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/glossary\/financial-statements\/","title":{"rendered":"Financial Statements &#8211; Objectives, Types, How to Read Financial Statements, and More"},"content":{"rendered":"\n<p>It is important for a business to have a comprehensive view of its performance in order to achieve its future goals. Therefore, every business prepares financial statements to determine its actual financial position.&nbsp;To understand financial statements, their types and more details, read further.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_22 counter-hierarchy counter-numeric\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">You will Learn About: <\/p>\n<span class=\"ez-toc-title-toggle\"><a class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" style=\"display: none;\"><i class=\"ez-toc-glyphicon ez-toc-icon-toggle\"><\/i><\/a><\/span><\/div>\n<nav><ul class=\"ez-toc-list ez-toc-list-level-1\"><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#What-is-a-financial-statement\" title=\"What is a financial statement?&nbsp;\">What is a financial statement?&nbsp;<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Return-on-equity-Highlights\" title=\"Return on equity: Highlights\">Return on equity: Highlights<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Objectives-of-financial-statements\" title=\"Objectives of financial statements\">Objectives of financial statements<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Advantages-of-financial-statements-analysis\" title=\"Advantages of financial statements analysis\">Advantages of financial statements analysis<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Disadvantages-of-financial-statements\" title=\"Disadvantages of financial statements\">Disadvantages of financial statements<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Types-of-financial-statements\" title=\"Types of financial statements\">Types of financial statements<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#How-to-read-financial-statements\" title=\"How to read financial statements?\">How to read financial statements?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#How-are-the-three-financial-statements-linked\" title=\"How are the three financial statements linked?\">How are the three financial statements linked?<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Using-financial-statements-to-grow-your-business\" title=\"Using financial statements to grow your business\">Using financial statements to grow your business<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><li class=\"ez-toc-page-1 ez-toc-heading-level-2\"><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/glossary\/financial-statements\/#FAQs\" title=\"FAQs\">FAQs<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What-is-a-financial-statement\"><\/span><strong>What is a financial statement?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" src=\"https:\/\/www.freshbooks.com\/wp-content\/uploads\/2022\/02\/financial-statements-importance.jpg\" alt=\"\"\/><figcaption class=\"wp-element-caption\">Image source: <a href=\"https:\/\/www.freshbooks.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">FreshBooks<\/a><\/figcaption><\/figure><\/div>\n\n\n<p>Financial statements act as the transcript of a business. They depict the profitability, ownership structure, financial position, and liquidity status of the business.&nbsp;<\/p>\n\n\n\n<p>The four major types of financial statements are- statements of profit and loss, balance sheets, cash flow statements, and statements of change in equity.&nbsp;<\/p>\n\n\n\n<p>The preparation of financial statements is guided by a set of <a href=\"https:\/\/www.tickertape.in\/glossary\/accounting-principles\/\">accounting principles<\/a> and methods. For example, General Accepted Accounting Principles (GAAP) have four basic principles- objectivity, materiality, prudence, and consistency. On the other hand, International Finance Reporting Standards (IFRS) have four basic principles- clarity, reliability, relevance, and comparability.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-uagb-advanced-heading uagb-block-37fca231\"><h2 class=\"uagb-heading-text\"><span class=\"ez-toc-section\" id=\"Return-on-equity-Highlights\"><\/span>Return on equity: Highlights<span class=\"ez-toc-section-end\"><\/span><\/h2><\/div>\n\n\n\n<ul>\n<li>Financial statements are written records that show the financial performance of the business.<\/li>\n\n\n\n<li>There are four main types of financial statements.<\/li>\n\n\n\n<li>Financial statements provide quantitative details and do not account for non-financial and qualitative information.<\/li>\n<\/ul>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Objectives-of-financial-statements\"><\/span><strong>Objectives of financial statements<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" src=\"https:\/\/cdn.educba.com\/academy\/wp-content\/uploads\/2020\/06\/Objectives-of-Financial-Statements.jpg\" alt=\"\"\/><figcaption class=\"wp-element-caption\">Image source: <a href=\"https:\/\/www.educba.com\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">eduCBA<\/a><\/figcaption><\/figure><\/div>\n\n\n<p>Some objectives of preparing financial statements are-&nbsp;<\/p>\n\n\n\n<ol>\n<li><strong>Present an accurate and fair view of a company<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Financial statements provide a comprehensive view of the business.&nbsp;<\/p>\n\n\n\n<p>This is because financial statements record and classify assets, liabilities, profit and loss, cash flow and ownership separately. This classification helps ascertain a company holistically. Financial statements also represent a company\u2019s financial health, net worth and growth prospects.&nbsp;<\/p>\n\n\n\n<ol start=\"2\">\n<li><strong>Provide sufficient information about the resources<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The financial statements provide a summary of all the resources that a business owns.&nbsp;<\/p>\n\n\n\n<p>Based on the financial statements, the management can make efficient decisions suitable for the business. For example, if the balance sheet shows that there are certain unpaid expenses from last year, the management may look at ways to ensure successful payment and closure of accounts.&nbsp;<\/p>\n\n\n\n<ol start=\"3\">\n<li><strong>Determine the efficiency of the management<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The financial statements also reflect the efficiency of management. For example, if sales of a business increase from last year, other factors remain constant, it means that the sales team has made notable efforts.&nbsp;<\/p>\n\n\n\n<ol start=\"4\">\n<li><strong>Forecast the future<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Based on past trends and records of financial data, the management can predict the future growth of the company and plan for the same accordingly.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Advantages-of-financial-statements-analysis\"><\/span><strong>Advantages of <\/strong><strong>financial statements analysis<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li><strong>Advantage to the management<\/strong><\/li>\n<\/ul>\n\n\n\n<p>The management may look at the financial statements to make short-term and long-term decisions according to a company\u2019s financial position.&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Advantage to the shareholders<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Shareholders can decide if they want to remain invested in the company or opt out based on the financial statements and health of the company.&nbsp;&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Advantage to the Government<\/strong><\/li>\n<\/ul>\n\n\n\n<p>The government can look at financial statements to determine a company\u2019s tax liabilities and check for compliance.&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Advantage to the employees<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Employees may scan financial statements to know how well the company is doing and assess their chances of getting bonuses, increments, and promotions.&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Advantage to the creditors<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Using financial statements, creditors can ascertain if the business can pay its interest obligations.&nbsp;<\/p>\n\n\n\n<ul>\n<li><strong>Advantage to competitors and external agencies<\/strong><\/li>\n<\/ul>\n\n\n\n<p>Competitors use financial statements for comparison and analysis.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Disadvantages-of-financial-statements\"><\/span><strong>Disadvantages of <\/strong><strong>financial statements<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Some limitations of the financial statements are-&nbsp;<\/p>\n\n\n\n<ol>\n<li><strong>Ignores qualitative aspect<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Financial statements only account for data that can be translated into numbers and quantitative data. They ignore the qualitative aspect of transactions, depicting an incomplete view of the business. For example, labour strikes may impact profitability and revenue. But this reason will not be defined when recording the numbers.&nbsp;<\/p>\n\n\n\n<ol start=\"2\">\n<li><strong>Window dressing<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Window dressing refers to making financial statements more attractive by manipulation. This may, in turn, misguide investors and creditors.&nbsp;<\/p>\n\n\n\n<ol start=\"3\">\n<li><strong>Biased information<\/strong><\/li>\n<\/ol>\n\n\n\n<p>There is a certain level of prejudice involved while preparing financial statements. For example, the management decides if the company will adopt a straight-line or written-down <a href=\"https:\/\/www.tickertape.in\/glossary\/depreciation-meaning\/\">depreciation<\/a> method. The two methods will give different results and can thus lead to misinterpretation.<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Types-of-financial-statements\"><\/span><strong>Types of financial statements<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/uploads-ssl.webflow.com\/62a9e41d28a7ab25849bce9c\/634531da275e5654ea915723_Types-of-Financial-Statements.jpg\" alt=\"\" width=\"750\" height=\"253\"\/><figcaption class=\"wp-element-caption\">Image source: <a href=\"https:\/\/www.amygb.ai\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">AmyGB<\/a><\/figcaption><\/figure><\/div>\n\n\n<p>There are four main types of financial statements<\/p>\n\n\n\n<ol>\n<li><strong>Balance sheet statement&nbsp;<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The balance sheet is a statement that summarises a business\u2019s assets and liabilities for a specified period. It represents the position of the business and also depicts the company\u2019s <a href=\"https:\/\/www.tickertape.in\/glossary\/what-is-capital-definition-of-capital-types-and-its-importance\/\">capital<\/a> structure.&nbsp;&nbsp;&nbsp;<\/p>\n\n\n\n<ol start=\"2\">\n<li><strong>Profit and loss statement<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The profit and loss statement provides an overview of the expenses and revenue during a specific accounting year. This statement gives an overview of whether the company is profitable or not and helps management take important financial decisions.&nbsp;<\/p>\n\n\n\n<ol start=\"3\">\n<li><strong>Cash flow statement<\/strong><\/li>\n<\/ol>\n\n\n\n<p>The cash flow statement shows a business\u2019s cash inflows and outflows during the year. It helps in determining the liquidity position. The cash flow statement has three main heads- operating activities, investing activities, and financial activities.&nbsp;<\/p>\n\n\n\n<ol start=\"4\">\n<li><strong>Statement of change in equity<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Statement of change in equity depicts the shareholding of the company. It shows the change in retained earnings, equity shares, preference shares, etc.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"How-to-read-financial-statements\"><\/span><strong>How to read financial statements?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/cloudinary.hbs.edu\/hbsit\/image\/upload\/s--mJNN2z8L--\/f_auto,c_fill,h_375,w_750,\/v20200101\/293D55ABEA675B9809255B9ADC271647.jpg\" alt=\"\" width=\"750\" height=\"375\"\/><figcaption class=\"wp-element-caption\">Image source: <a href=\"https:\/\/online.hbs.edu\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Harvard Business School Online<\/a><\/figcaption><\/figure><\/div>\n\n\n<p>Financial statements analysis can be done as follows \u2013&nbsp;<\/p>\n\n\n\n<ol>\n<li><strong>Horizontal analysis<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It compares the current financial performance of a company to the base year\u2019s financial performance.&nbsp;<\/p>\n\n\n\n<ol start=\"2\">\n<li><strong>Vertical analysis<\/strong><\/li>\n<\/ol>\n\n\n\n<p>It compares each component in the financial statements to a specific component. For example, in the income statement, the cost of goods sold, administrative expenses, etc., are compared as a percentage of revenue.&nbsp;<\/p>\n\n\n\n<ol start=\"3\">\n<li><strong>Ratio analysis<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Ratio analysis helps assess the company\u2019s liquidity, profitability, and operational efficiency. For example, current assets and current liabilities are used to calculate the <a href=\"https:\/\/www.tickertape.in\/glossary\/current-ratio\/\">current ratio<\/a> of a business.&nbsp;<\/p>\n\n\n\n<ol start=\"4\">\n<li><strong>Comparison with competitors\/benchmarks<\/strong><\/li>\n<\/ol>\n\n\n\n<p>Financial statements can also be compared to the competitors and target benchmarks in order to understand areas where the business can improve.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"How-are-the-three-financial-statements-linked\"><\/span><strong>How are the three financial statements linked?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>&nbsp;All financial statements are interlinked. The net profit, recorded at the bottom of the income statement, is linked to the balance sheet and cash flow statement. For example, if a company purchases a piece of machinery, it is recorded as an asset on the balance sheet. However,&nbsp; depreciation is recorded in the income statement, and the cash outflow is shown in the cash flow statement.&nbsp;&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"Using-financial-statements-to-grow-your-business\"><\/span><strong>Using financial statements to grow your business<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Financial statements help ascertain the true value of a company, thereby aiding growth.<\/p>\n\n\n\n<p>As they represent the liquidity position, operational efficiency, future earning capacity, and profitability, financial statements can guide decision-making and enable a company to grow.&nbsp;<\/p>\n\n\n\n<p>You can use Tickertape to check the financial statements of a company and for peer comparison. Go to any <a href=\"https:\/\/www.tickertape.in\/glossary\/stock\/\">stock<\/a> page and click on the &#8216;Financials&#8217; tab. You can view the statements in the &#8216;Normal&#8217; and &#8216;Growth&#8217; views. Here&#8217;s an example of <a href=\"https:\/\/www.tickertape.in\/stocks\/reliance-industries-RELI?checklist=basic&amp;chartScope=1d\" target=\"_blank\" rel=\"noreferrer noopener\">Reliance Industries Ltd<\/a>&#8216;s balance sheet &#8211; <\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"1024\" height=\"701\" src=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-13-at-4.21.10-PM-1024x701.png\" alt=\"\" class=\"wp-image-9990\" srcset=\"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-13-at-4.21.10-PM-1024x701.png 1024w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-13-at-4.21.10-PM-300x205.png 300w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-13-at-4.21.10-PM-1536x1051.png 1536w, https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/Screenshot-2023-02-13-at-4.21.10-PM-300x205@2x.png 600w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><em>Balance Sheet of <a href=\"https:\/\/www.tickertape.in\/stocks\/reliance-industries-RELI\/financials?checklist=basic&amp;period=annual&amp;statement=balancesheet&amp;view=normal\" target=\"_blank\" rel=\"noreferrer noopener\">Reliance Industries Ltd<\/a><\/em><\/figcaption><\/figure><\/div>\n\n\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Financial statements are used to determine the true standing of a company. These statements depict profit and loss, ownership, assets and liabilities, and all necessary financial data. This helps organisations make decisions, forecast, and understand the areas of improvement. Financial statements can be read in various ways. Consult with an expert when reading the financial statements of a company.&nbsp;<\/p>\n\n\n\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-uagb-faq uagb-faq__outer-wrap uagb-block-05203790 uagb-faq-icon-row uagb-faq-layout-accordion uagb-faq-expand-first-true uagb-faq-inactive-other-true uagb-faq__wrap uagb-buttons-layout-wrap uagb-faq-equal-height\" data-faqtoggle=\"true\" role=\"tablist\">\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-4f443971\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>Do non-profit organisations prepare financial statements?\u00a0<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Yes, NPOs also prepare financial statements. However, the methodology of reporting and recording may vary slightly.\u00a0<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-8a7329e4\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>Does the balance sheet always balance?<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Yes, the balance sheet will always balance. This is because every transaction has a double effect.\u00a0<\/p><\/div>\n\n\n\n<div class=\"wp-block-uagb-faq-child uagb-faq-child__outer-wrap uagb-faq-item uagb-block-0750023b\" role=\"tab\" tabindex=\"0\"><div class=\"uagb-faq-questions-button uagb-faq-questions\"><span class=\"uagb-icon uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M432 256c0 17.69-14.33 32.01-32 32.01H256v144c0 17.69-14.33 31.99-32 31.99s-32-14.3-32-31.99v-144H48c-17.67 0-32-14.32-32-32.01s14.33-31.99 32-31.99H192v-144c0-17.69 14.33-32.01 32-32.01s32 14.32 32 32.01v144h144C417.7 224 432 238.3 432 256z\"><\/path><\/svg><\/span><span class=\"uagb-icon-active uagb-faq-icon-wrap\"><svg xmlns=\"https:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 448 512\"><path d=\"M400 288h-352c-17.69 0-32-14.32-32-32.01s14.31-31.99 32-31.99h352c17.69 0 32 14.3 32 31.99S417.7 288 400 288z\"><\/path><\/svg><\/span><span class=\"uagb-question\"><strong>What are retained earnings?\u00a0<\/strong><\/span><\/div><p class=\"uagb-faq-content\">Retained earnings are parts of the profit left after the payment of dividends.<\/p><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Financial statements are records of the company depicting its performance over the course of time. Here is everything you need to know about financial statements.<\/p>\n","protected":false},"author":27,"featured_media":9991,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[1930,1],"tags":[1929],"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1.png","uagb_featured_image_src":{"full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1.png",2086,1086,false],"thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-150x150.png",150,150,true],"medium":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-300x156.png",300,156,true],"medium_large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1.png",768,400,false],"large":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-1024x533.png",770,401,true],"1536x1536":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-1536x800.png",1536,800,true],"2048x2048":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-2048x1066.png",2048,1066,true],"authorship-box-avatar":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-150x150.png",150,150,true],"authorship-box-related":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-70x70.png",70,70,true],"post-thumbnail":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-270x180.png",270,180,true],"contentberg-main":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-770x515.png",770,515,true],"contentberg-main-full":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-1170x508.png",1170,508,true],"contentberg-slider-stylish":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-900x515.png",900,515,true],"contentberg-slider-carousel":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-370x370.png",370,370,true],"contentberg-slider-grid-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-554x466.png",554,466,true],"contentberg-slider-grid-b-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-306x466.png",306,466,true],"contentberg-slider-bold-sm":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-150x150.png",150,150,true],"contentberg-grid":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-370x245.png",370,245,true],"contentberg-list":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-260x200.png",260,200,true],"contentberg-list-b":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-370x305.png",370,305,true],"contentberg-thumb":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-87x67.png",87,67,true],"contentberg-thumb-alt":["https:\/\/www.tickertape.in\/glossary\/wp-content\/uploads\/2023\/02\/2-1-1-150x150.png",150,150,true]},"uagb_author_info":{"display_name":"Aradhana Gotur","author_link":""},"uagb_comment_info":0,"uagb_excerpt":"Financial statements are records of the company depicting its performance over the course of time. Here is everything you need to know about financial statements.","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/9989"}],"collection":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/comments?post=9989"}],"version-history":[{"count":2,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/9989\/revisions"}],"predecessor-version":[{"id":9995,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/posts\/9989\/revisions\/9995"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media\/9991"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/media?parent=9989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/categories?post=9989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/glossary\/wp-json\/wp\/v2\/tags?post=9989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}