Financial statements |

Financial statements are a numerical portrait of a company: documents that summarize what it owns, what it owes, and whether it has made a profit. The two main ones are the balance sheet (what we have and what we owe at a given date) and the income statement (revenues minus expenses over a period).

Brief

The balance sheet: what the company owns, what it owes, and what remains for the owners once the debts are paid.
The income statement: the revenues, expenses and profit for a period;
Sometimes a statement of cash flows: the actual inflows and outflows;
Required for corporate tax purposes (T2 returns at the federal level, CO-17 in Quebec) and to obtain a loan

Why does this matter?

Imagine trying to sell your car without ever having recorded its mileage or repair history: the buyer and the bank have no basis for trusting you. Financial statements play this role for a business. The balance sheet answers "what is it worth?" and the income statement "is it profitable?" A bank examines them before granting a loan, a buyer before making a purchase. Poorly prepared figures can jeopardize financing or a sale. Bankeo connects you with a verified accountant/CPA, free of charge, who will prepare them according to industry standards, and we'll be there to support you every step of the way.

Frequently asked questions

What exactly is it?

These are two or three tables that tell the story of the company's money: what it owns and what it owes (the balance sheet), what it has earned and spent (the income statement), and sometimes where its money comes from and where it goes (the cash flow statement).

Who is required to produce financial statements?

Every public limited company (a "incorporated" company, meaning a company legally separate from its owner) produces this information annually as part of its tax liability. A self-employed individual is not required to do so, but still gains a clear understanding of it for managing their finances and borrowing.

Do I need an accountant to do them?

For internal use, software may suffice. But for tax purposes, a bank, or an investor, it's better to have statements prepared according to industry standards. Bankeo will connect you with a verified accountant/CPA free of charge, and we'll continue to support you even afterward.