Memo

Running Head : Memo

Memo

Financial Statements Analysis

Name

School

Teacher

Subject

From : Accountant

To : Rj Falk - Chief Executive Officer

Subject : Financial Statements Analysis

Date : July 30 , 2010

The purpose of this memo is to explain the bases for comparison in analyzing key common financial templates for Ventura Electronics and discuss also its limitations

Fundamental Financial Statements

The most common and often reviewed financial statements by analysts are the Income Statement , Balance Sheet , and the Cashflow Statement . First is the Income Statement , the main

function of this statement is to provide an overview for managers , executives and shareholders on the firm 's total earnings over a specific time frame . It is also sometimes called as the Profit and Loss statement ' since it shows how Ventura 's business operates with its expenses and revenues for the company 's operating and non-operating activities . Basically the definition of operating and non operating activities on our firm is pretty much self-explanatory , but for the purpose of avoiding confusion and clarification , operating activities essentially means that these are the activities that have the direct impact on Ventura 's regular operations such as manufacturing and selling electronics . On the other hand non-operating activities only means expense and revenue data and figures that are not linked directly to Ventura 's operations , as an example would be selling and old machinery that was previously used for production

But most importantly what the Income statements tells us is whether the firm has gained a Net Income or simply a profit...