Boost your business's financial tracking with our Template for Financial Statements. A step-by-step roadmap to streamline data gathering, calculations, reviews, and approvals.
1
Identify the period for financial statement
2
Collect data of revenues and expenses
3
Calculate Gross Profit
4
Collect data of operational expenses
5
Calculate Operating Income
6
Collect data about taxes and interest
7
Calculate Net Income Before Taxes
8
Calculate Net Income
9
Collect data for balance sheet
10
Calculate Total Assets
11
Identify all existing liabilities
12
Calculate Total Liabilities
13
Calculate owner's equity
14
Prepare finance statement draft
15
Approval: Finance Department
16
Review and correct any errors
17
Prepare final financial statement
18
Approval: CEO
19
Publish and distribute financial statement
Identify the period for financial statement
Specify the time frame for which the financial statement will be prepared. This task sets the basis for organizing and analyzing financial data. What is the duration of the period? Why is it important to define this accurately? How will this information impact decision-making? Make sure to communicate if it's a monthly, quarterly, or annual period.
1
Monthly
2
Quarterly
3
Annual
Collect data of revenues and expenses
Gather all the information related to revenues and expenses. This step involves recording income, sales, costs, and other financial transactions. How will you ensure accurate data collection? What types of revenues and expenses should be considered? What sources will be used to gather this data?
1
Retrieve sales records
2
Collect expense receipts
3
Capture payroll information
Calculate Gross Profit
Analyzing revenues and expenses allows us to calculate the gross profit. What formula will be used to calculate gross profit? What are the key components of this calculation? What insights can be drawn from this analysis? What challenges might arise during the calculation process?
Collect data of operational expenses
Obtain data on operational expenses to calculate the operating income. Operational expenses include costs such as rent, utilities, salaries, and inventory. What strategies will be used to collect data on operational expenses? What tools or resources are available for this task? How will this information impact the overall financial statement?
1
Compile rent expenses
2
Gather utility bills
3
Collect payroll information
Calculate Operating Income
The next step is to calculate the operating income based on the collected data. Operating income reveals the profitability of normal business operations. What formula will be used to calculate operating income? What will be considered as operating expenses in this calculation? What insights can be derived from understanding operating income? Are there any common challenges in this calculation?
Collect data about taxes and interest
Collect relevant information related to taxes and interest expenses. This data will be crucial for calculating net income before taxes. How will you gather tax and interest expense data? What specific types of taxes and interest should be considered? How will this information be utilized in the calculation process?
1
Retrieve tax records
2
Gather interest expense statements
Calculate Net Income Before Taxes
Using the collected data, calculate the net income before taxes. This figure represents the profit generated before taxes are deducted. What formula will be used to calculate net income before taxes? How will tax and interest data be incorporated into the calculation? What insights can be gained from analyzing this figure?
Calculate Net Income
Determine the net income by deducting taxes from the net income before taxes figure. Net income reflects the final profit after tax obligations are accounted for. What formula will be used to calculate net income? How will tax data be utilized in this calculation? What significance does net income hold for the financial statement?
Collect data for balance sheet
Collect necessary information to construct the balance sheet. The balance sheet provides insights into an organization's financial position at a specific point in time. What specific data elements will be included in the balance sheet? How will this data be collected and organized? What are the possible challenges in obtaining accurate balance sheet data?
1
Retrieve asset information
2
Gather liability details
3
Record equity information
Calculate Total Assets
Calculate the total assets by summing up all the asset values recorded in the balance sheet. What formula will be used to calculate total assets? Which asset categories will be considered in this calculation? What insights can be derived from analyzing the total assets figure?
Identify all existing liabilities
Ensure all liabilities are identified to accurately represent the financial position. Liabilities include debts, loans, payables, and other financial obligations. How will you identify and record liabilities? What types of liabilities should be considered? What resources or tools can aid in identifying all liabilities?
1
Review loan agreements
2
Collect payable invoices
3
Identify outstanding debts
Calculate Total Liabilities
Calculate the total liabilities using the identified liabilities recorded in the balance sheet. This figure represents the total amount owed by the organization. What formula will be used to calculate total liabilities? Which liability categories will be considered in this calculation? What insights can be derived from analyzing the total liabilities figure?
Calculate owner's equity
Calculate the owner's equity to determine the residual value of the business. Owner's equity represents the ownership interest in the organization. How will owner's equity be calculated? What components are involved in this calculation? What does owner's equity signify for the financial statement?
Prepare finance statement draft
Create a draft version of the financial statement using the calculated figures. This draft will serve as a basis for review and finalization. How will the draft be structured? What sections will be included? How will the calculated figures be presented in the draft?
1
Structure the statement sections
2
Insert calculated figures
3
Include necessary headings
Approval: Finance Department
Will be submitted for approval:
Prepare finance statement draft
Will be submitted
Review and correct any errors
Thoroughly review the drafted financial statement to identify and fix any errors or discrepancies. This step ensures the accuracy and reliability of the final statement. How will the review process be conducted? What common errors should be looked for? How will identified errors be corrected?
1
Verify numerical accuracy
2
Check for formatting inconsistencies
3
Review calculations
Prepare final financial statement
Based on the reviewed draft, prepare the final version of the financial statement. This step involves incorporating any necessary corrections or amendments. What adjustments need to be made from the draft version? How will the final statement be organized and presented? How will the calculated figures and sections be updated?
1
Incorporate reviewed corrections
2
Update headings and sections
3
Validate numerical accuracy
Approval: CEO
Will be submitted for approval:
Prepare final financial statement
Will be submitted
Publish and distribute financial statement
Publish and distribute the final financial statement to relevant stakeholders. This step ensures transparency and communicates the financial health of the organization. Who are the intended recipients of the financial statement? How will the statement be distributed? Through what channels? What are the security considerations?