What Makes the Financial Statement of Banks & Manufacturing Company's Different?

Print this article Every day, scores of investment managers delve into the financial statements of publicly traded companies, advising clients on long-term trading strategies. Alt hough financial analysts use similar tools to evaluate accounting information, t here are distinct items they pay attention to in the financial statements of ban ks and manufacturing companies. Other People Are Reading How to Analyze a Banks Financial Statement Methods of Analyzing Financial State ments Financial Statement An accounting report indicates to the public whether corporate management's stra tegies are bearing fruit, financially speaking. There are four types of financia l statements: a balance sheet, a statement of profit and loss, a statement of ca sh flow and a statement of stockholders' equity. Regulatory guidelines also requ ire publicly listed companies to disclose significant non-financial information in a separate report. Balance Sheet A balance sheet is also called a statement of financial position or statement of financial condition. It indicates a company's assets, liabilities and equity ca pital. A bank's assets include loans and investment receipts from business partn ers. In contrast, a manufacturing firm's resources include heavy production equi pment, machinery and computer-aided manufacturing systems. On the debt front, di fferences are as follows: Banks' liabilities include customer deposits, whereas the financial obligations of manufacturers include long-term loans and bonds. Sponsored Links Worthless Tech Stocks Most are, but some are great buys Free report shows you how to choose WealthWire.com/Tech_Stocks Statement of Cash Flows A statement of cash flows provides insight into a company's liquidity movements. A bank's cash inflows include borrowers' interest remittances and loan repaymen ts. Conversely, a manufacturer receives cash from customers who buy its products . They are similar in cash outflows for financial institutions and manufacturing companies. Both spend money paying for operating charges and settling debts, am ong other expenses. Income Statement An income statement is also referred to as a statement of profit and loss, or P& L. It indicates a firm's revenues, expenses and net result -- which may be incom e or loss if revenues surpass or dwarf expenses. A bank's income stems from lend ing fees, trading surpluses and interest remittances. Its operating expenses inc lude trading deficits, loan write-offs and interest payments. A manufacturing fi rm generally earns money by selling tangible products. Its expenses include fact ory charges, such as costs of raw materials, labor and storage fees for semi-fin ished items and completely finished products. Statement of Stockholders' Equity An equity report indicates how much money investors poured into a company. It al so shows dividend payments to shareholders and the firm's retained earnings, or accumulated profits. The equity statements of a bank or a manufacturing firm may be similar because report items relate to general factors rather than specific industry considerations. For example, the same investor may invest in a bank or manufacturing firm.

Disclosure Notes A manufacturing firm may disclose in its financial statements how it complies wi th U.S. Securities and Exchange Commission (SEC) rules, as well as Occupational Safety and Health Administration guidelines for handling hazardous materials. In contrast, a bank may show steps it takes to conform to rules that the U.S. Trea sury Department and Federal Reserve promulgate.

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