Advanced English Dialogue for Business – Financial statement

Listen to a Business English Dialogue About Financial statement

Kinsley: Hi Kevin, do you know what a financial statement is?

Kevin: Yes, a financial statement is a document that provides information about the financial activities and position of a company, including its income, expenses, assets, and liabilities.

Kinsley: That’s correct. Financial statements are crucial for stakeholders like investors and creditors to assess the performance and health of a business.

Kevin: How often are financial statements prepared?

Kinsley: Financial statements are typically prepared quarterly and annually, following standard accounting periods.

Kevin: What are the main components of a financial statement?

Kinsley: The main components include the income statement, balance sheet, and cash flow statement, each providing different insights into the company’s financial performance.

Kevin: How does the income statement differ from the balance sheet?

Kinsley: The income statement shows the company’s revenues and expenses over a specific period, while the balance sheet provides a snapshot of its assets, liabilities, and equity at a particular point in time.

Kevin: What about the cash flow statement?

Kinsley: The cash flow statement details the inflows and outflows of cash during the reporting period, helping assess a company’s ability to generate cash and meet its financial obligations.

Kevin: Are there any regulations regarding financial statements?

Kinsley: Yes, financial statements must adhere to generally accepted accounting principles (GAAP) or international financial reporting standards (IFRS) to ensure consistency and comparability.

Kevin: How do investors use financial statements?

Kinsley: Investors use financial statements to analyze a company’s financial health, profitability, and growth potential before making investment decisions.

Kevin: Thanks for the explanation, Kinsley. Financial statements seem essential for understanding a company’s financial status.

Kinsley: You’re welcome, Kevin. They indeed provide valuable insights for investors and other stakeholders in evaluating a company’s performance and prospects.