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Creating Financial Statements | Template For Financial Statement

What are financial statements?

Financial statements are reports that summarize important financial accounting information about your business. There are three main types of financial statements: the balance sheet, income statement, and cash flow statement.

Together, these statements provide you—and outside people like investors—a clear picture of your company’s financial position. By using a template for financial statements, you can allow your business's data and information to be more consolidated in an efficient and readable manner. This blog post will show you exactly what this means and how to do it.


Common Types of Financial Statements

1. Balance Sheets as the First Part of the Template for Financial Statements

A balance sheet is a snapshot of your business finances as it currently stands. It tells you about the assets you own, and liabilities (i.e., debts) you owe, at a particular point in time.

How often your bookkeeper prepares a balance sheet for you will depend on your business. Some businesses get daily or monthly financial statements, some prepare financial statements quarterly, and some only get a balance sheet once a year.

For example, banks move a lot of money, so they prepare a balance sheet every day. On the other hand, a small Etsy shop might prepare a balance sheet every three months.

This sheet contains information about the company's liabilities, assets, and shareholders' equity, and is based on this accounting equation:

assets = liabilities plus shareholder's equity

Shareholders’ equity is a term that refers to the net worth of a company. It reflects the amount of money that would be left if all assets were sold and all liabilities paid. This money belongs to the shareholders.


Assets are anything the company owns that has quantifiable value. This may include physical property (vehicles, real estate, unsold inventory, etc.), as well as non-physical property (patents, trademarks, etc.).

Liabilities refer to money the company owes to a debtor. This may include outstanding payroll expenses, debt payments, rent and utility payments, money owed to suppliers, taxes, bonds payable, and more.

Sample Balance Sheet Walkthrough


Let’s say you run a food cart selling ice cream.

At the end of June, as part of the template for financial statements, you get a balance sheet from your bookkeeper. It looks like this:

June Balance Sheet

a June balance sheet with assets liabilities and equity

Not bad! It’s summer, your busiest time of year. One month passes.

At the end of July, your balance sheet shows this:

July Balance Sheet

A July balance sheet with assets, liabilities, and equity, but with more assets than June.

Nice. You’ve added $1,000 to your retained earnings by saving more cash, even though your liabilities haven’t changed.

This is useful information. But it’s not the full picture.

Does your balance sheet tell you…

…how much ice cream you sold? No.

…how much cash you received? No.

…how much it cost you to make the ice cream you sold? No.

…how much you spent on expenses? No.

This is where the income statement comes in.

2. The Template for Financial Statements also Includes Income Statements


An income statement is a report that a company generates to communicate how much money the company has earned over a period of time. It shows you how much you made (revenue) and how much you spent (expenses).

  • Revenue: how much you earned from selling product or service

  • Cost of Goods Sold (COGS): the total amount it cost you to make the product or service

    • Gross Profit: tells you how profitable your products are

      • Gross Profit = Revenue - COGS

  • Operating Expenses: the cost of running your business, not including COGS

  • Net Profit: tells you how profitable your business is

    • Net Profit = Gross Profit - Operating Expenses


Sample Income Statement Walkthrough

Suppose we have an income statement for July that looks like this:

July Income Statement

A July income statement with revenues and expenses