Financial Statement Analysis
& Prep for Small Businesses

Jacobsen & Wachterhauser, PLC offers financial statement preparation for small and mid-size business in Arizona. We are dedicated to delivering accurate preparation of your financial statements in accordance with tax laws.

We offer preparation and analysis of all financial statement documents, including income statements, P&L, statement of cash flows, balance sheets, and statements of retained earnings.

All financial statement work is analyzed and prepared by a CPA. We guarantee the quality of our work and deliver an accurate and precise representation of your business for all financial statement users.

Our offices are centrally located in the Camelback area in Phoenix. We are always available to assist you, to schedule a consultation click here to contact us.

Income Statements
An income statement, also sometimes referred to as the statement of operations; earnings statement; or profit and loss statement, is primarily used to report a company’s profitability over a specified period of time. The term ‘bottom line’ refers to net income, because the last line on an income statement is typically the net income figure.

Retained Earnings Statement
Perhaps the most notable purpose for knowing an organization’s retained earnings, is for the company’s management. Excess earnings may be allocated towards various departments to help promote future growth. Consequently, if a loss is reported, the organization’s upper-level management may be forced to alter operations to reduce any future deficits.

Balance Sheets
A balance sheet most commonly lists assets, followed by liabilities and stock holders’ equity. At a specific point in time, a balance sheet can provide a quick reference of the financial condition of an organization.

Statement of Cash Flows Importance
The statement of cash flows, also referred to as the cash flow statement, is an important financial document that reports cash transactions based on operating activities, investing activities, and financial activities during an accounting period. The statement of cash flows data is interpreted by its reader to show whether a firm is experiencing declining earnings or improved earnings, allowing investors and lenders to make risk factor decisions. Understanding the information disclosed in the statement is a crucial factor of being able to properly assess a firm’s current stability and future wellbeing. Below is a discussion of the uses of the statement of cash flows and its importance for assessing the financial strength of an organization.

The primary purpose of a statement of cash flows is to provide relevant information about the cash receipts and cash payments of an enterprise during a period. Users of the statement of cash flows expect to discover the net increase, or decrease, in cash during a period. This is accomplished by carefully analyzing the cash effects on operations, investment transactions, and financial transactions. By doing so, the user can determine where the main sources of cash were generated from; how much of the firm’s cash was used and whether the cash was used for operation expenses, investing, or other financial transaction; including what the change in the cash balance was during the period.

There are two commonly accepted approaches for preparing the statement of cash flows – the indirect method and the direct method. The indirect method assesses cash flows derived from accrual basis accounting. Accrued items on the income statement’s current assets and liabilities are adjusted under operating activities for net income. The direct method will determine cash flows for each direct source of cash, or use of cash. For investing and financial activities, the activities are reported in the same way for both the direct and indirect methods when preparing an organization’s statement of cash flows.

The statement of cash flows is designed to help users with making informed decisions based on the company’s cash flows. By analyzing cash inflows and cash outflows, the reader can assess many important aspects associated with the firm. These aspects include the firm’s ability to generate future cash flows and to meet financial obligations. In addition, the user can gather key data for why the firm has differing net income and net cash.

Additional Financial Accounting Information:

• Interfund Transfer Purpose and Reporting
  Either using a previous selected government entity CAFR or another government entity, identify where an interfund transfer has occurred? The Virginia DOA experienced several interfund transfers throughout the fiscal year. One example of an interfund transfer occurred when the entity’s General Fund tranfered $25,301 to... […]
• State of Arizona Capital Project and Debt Service Funds
  How many capital project funds does the State of Arizona maintain? The State of Arizona maintains two capital project funds, Governmental Activities and Business-type Activities. This information can be located by visiting the State of Arizona’s Basic Financial Statements in their annual CAFR. Are any... […]
• Forms of Revenue for Governmental Organizations
  Either using a previous selected government entity CAFR or another government entity you are interested in, what are some examples of that government’s source of revenue? The Virginia DOA’s 2008 CAFR details several funds that are the entity’s main sources of revenue. Taxes account for... […]
• FASB Statement 117 and Classifications of Net Assets
  Using a previous selected NFP CAFR or another NFP CAFR you are interested in, identify the three classifications of net assets established by FASB Statement 117? In accordance with FASB Statement No. 117, not-for-profit organizations must classify their net assets into three categories – unrestricted... […]
• AARP Comprehensive Annual Financial Report
  Using a previous selected NFP CAFR or another NFP CAFR you are interested in, what significant way does this not-for-profit account for investments differently from businesses? According to the notes in the AARP’s annual financial reports, investments with original maturities of three months or less... […]
• FASB Mulls Tightening of Current Liabilities Definition
  FASB mulls tightening of current liabilities definition, by Glenn Cheney in April of 2004: This article addresses the Financial Accounting Standards Board (FASB) concern with converging U.S. standards to international accounting standards by defining current liabilities. The proposal is aimed towards properly defining current liabilities... […]
• General Information about Government Accounting
  The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from: The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from governments and not-for-profit organizations in that they hav […]
• Difference Between Assurance, Attestation and Auditing Services
  The American Institute of Certified Public Accountants (AICPA) and the Institute of Internal Auditors (IIA) have positioned the auditing professions to become “assurance professions”. What is the difference between assurance services, attestation services, and auditing services? Attestation services involve providing written conclusions that attest to... […]
• Sarbanes-Oxley Act and the Audit Environment
  Ways in which the Sarbanes-Oxley Act of 2002 changed the audit environment for auditors: The Sarbanes-Oxley Act of 2002 (SOX) changed the audit environment for auditors by restricting the services that auditors are permitted to perform for a client. Auditors cannot perform bookkeeping related to... […]
• For-Profit, Not-for-Profit and Government Organization Reporting
  Differences that exist in financial reporting in for-profit and government organizations include: Government organizations prepare their financials for the public at large, whereby they can be judged based on their ability to do good with the funds they were initially provided. For-profit organizations prepare their... […]