What are financial reports?
Financial reports, or financial statements, summarise how a business has performed and where it stands. Three of them do most of the work: the income statement shows profit over a period, the balance sheet shows what the business owns and owes on one date, and the cash flow statement shows where cash came from and went.
The three templates
Income statement
Also called a profit and loss statement. It starts with revenue, takes off the cost of goods sold to reach gross profit, then operating expenses to reach operating profit, and finally interest and tax to reach net profit.
Balance sheet
A snapshot on a single date. Assets are listed first, then liabilities and equity. The two sides must be equal, and the template tells you when they are not and by how much.
Cash flow statement
Explains the change in the bank balance. It groups cash movements into operating, investing and financing activities, and adds the net change to the opening balance to give the closing balance.
How to use the templates
- Choose a statement and enter your business name and the period.
- Replace the example amounts with your own. Rename lines, remove the ones you do not need and add new ones in any section.
- Enter money going out as a negative number on the cash flow statement, and deductions such as accumulated depreciation as negatives on the balance sheet.
- Choose Print / Save as PDF or Download CSV when the figures are in.
Good to know
- Negative amounts are shown in brackets, the usual accounting style.
- The net profit on the income statement should match the first line of the cash flow statement, and closing cash should match cash on the balance sheet.
- These templates organise your figures; they do not replace the judgement of an accountant on what belongs on each line.
Frequently asked questions
What is the difference between an income statement and a balance sheet?
An income statement covers a period, such as a year, and shows revenue, costs and profit. A balance sheet is taken on one date and shows assets, liabilities and equity at that moment.
Why does my balance sheet not balance?
Total assets must equal total liabilities plus equity. A difference usually means a missing line, an amount entered on the wrong side, or retained earnings that have not been updated with the year’s profit.
Can I change the lines in the templates?
Yes. Every line name and amount can be edited, and each section has an “Add a line” button. Removing a line takes it out of the totals.