Filling out a financial statement form is something you might have to do during a divorce or to explain how your business operates. The purpose of this form is to provide a clear snapshot of your financial situation. Here is what you need to know about filling out a financial statement.
A financial statement is usually required when you need to give a clear picture of your financial situation. Individuals and businesses use these forms when a legal process such as a divorce or a sale calls for details information about finances. Here is what you need to know about filling out a financial statement form
Who Needs To Fill Out A Financial Statement Form?
An individual would typically need to fill out one of these forms to show how much they earn and to give an idea of what their financial obligations are in the context of a divorce.
For businesses, financial statements are used to secure financing, to attract investors, and to keep track of how the business is performing.
If you need to fill out a financial statement for yourself or your business, don’t wait until the last minute. The form is straightforward but gathering the information and supporting documents you will need can take some time.
It is important to provide information that is correct to the best of your knowledge. If you submit a financial statement in the context of a divorce, the court could ask for additional evidence. If you need to fill out a financial statement for a business, investors or creditors will eventually figure out that there is a discrepancy between the financial statement and the way the business operates.
You will have to include personal information on your financial statement, such as your name and address. If you are filling out a statement for a business, you will need to fill out fields that ask about the business name, the identity of the owners, and the structure of the business.
This is one of the most important sections of a financial statement. If you are filling out a personal form, make sure you include all income sources. You will need to list the weekly income you are receiving from wages, self-employment income, disability income, income from rental properties, and more. You should also include payments you are receiving from alimonies or child support.
If you are filling out a personal financial statement, you will need to calculate your weekly income. Calculate an average if your hours and income tend to fluctuate from one week to the next.
For a business, you would typically need to list the total revenues in this section. If there are no costs associated with the goods or services you offer, you can fill out a basic income statement. The purpose of a basic income statement is to show the profits generated.
Otherwise, you will need to fill out a more detailed statement that allows you to deduct the cost of the goods sold. Deduct this amount from the business income to obtain the gross income.
Depending on the purpose of the business financial statement you are filling out, you might need to list income on a monthly or yearly basis.
You need to include the deductions taken from your paycheck for federal and state taxes if you are reporting your income.
If you are filling out a financial statement form for a business, you can deduct your operating costs. You can deduct the cost of manufacturing, rent, and the wages you pay your employees among other expenses.
Income From Previous Year
You will typically need to include your income from the previous year. You need to report your gross income before taxes, as reported on your W2 or 1099.
If you are filling out a financial statement for a business, list your profits for the previous year. Make sure you attach relevant tax documents.
This is another crucial part of the form. Listing your expenses gives an idea of how much money you have left once you have taken care of your different financial responsibilities.
Here are some of the expenses you can list on a personal financial statement:
Keep in mind that you need to list your weekly expenses. Go over your bank account and figure out how much you spend on these different things over a long period so you can calculate a weekly average.
You need to list your different assets along with their value in this section. This includes your real estate properties, vehicles, and other assets.
Include an estimate of the value of your real estate properties. The estimate should reflect what you could get if you were to sell the property now. The purchase price can be used if you purchased the property recently. You should also list the unpaid balance on any existing mortgages, and calculate how much equity you owe on the property.
You should also list your vehicles. Include the current market value of each vehicle. If you have a car loan, list the balance and calculate how much equity you owe in each vehicle.
Other assets you should list include valuable furniture, jewelry, electronics, etc.
For a business, the assets would be the equipment you use for manufacturing, company vehicles, office furniture, buildings, or the business’ inventory.
You need to list all your existing debts in this section. You should include details about the person or company you owe money to, what kind of loan you need to repay, and the date on which the debt was incurred. Calculate how much you are paying on your different loans and credit lines on a weekly basis.
You should list any existing loans and credit card debt as well as the money you owe friends and family members. Outstanding tax bills should also appear in the liabilities section.
If you are filling out a financial statement form for a business, you should think about attaching a balance sheet. The purpose of a balance sheet is to provide more insight into the assets, liabilities, and equity owned by shareholders.
The balance sheet will give investors a good idea of how your business operates and how healthy it is. Using a balance sheet allows you to provide more details into your long-term financial obligations and how the business operates.
Divide your balance sheet to reflect your current business finances and long-term obligations. For instance, current assets would include your inventory while your long-term assets would include the machines you have invested in for manufacturing. The current liabilities of your business are the invoices you need to pay, while the long-term liabilities would include your business loan.
A financial statement might be sufficient if you need to show how much your business is worth. However, if an investor or creditor needs to know more about how your business operates, a balance sheet is a great way to show how much you have invested in assets and how the business meets its financial obligations.
Cash Flow Statement
A cash flow statement will show how your business generates cash to take care of the different liabilities. Attaching a cash flow statement to a financial statement provides more details regarding where the money comes from and how cash is handled.
You can use a cash flow statement to keep track of the profits generated from the goods or services sold and to list all the payments you make, including tax payments, salaries, rent, and operating expenses.
Some of the information will be redundant, but a cash flow statement can be an interesting addition to a financial statement if you want to show how your business operates. Make sure you attach relevant bank statements that show the profits and expenses listed on your cash flow statement.
You can create a cash flow statement that reflects profits and expenses for a month if you want to show how your business operates. However, a statement that reflects cash flow over a longer period might be needed, for instance, if you are applying for a business loan.
You need to attach supporting documents to your financial statement. You should attach as many supporting documents as possible to prove that the information you provided is correct.
Here are a few documents you should attach to your financial statement:
For a business, you would need to include supporting documents that show the amount of your business loan payments, bank statements for your business account, bills from your suppliers, and documents that show what you paid for the different assets.
Don’t wait until the last minute to fill out your financial statement, whether you need one for personal reasons or your business. You will need to go over your finances and identify your different sources of income and expenses. Gathering the supporting documents you need can also take some time.