Financial position is the resources available to a company, while financial statement is a snapshot of that financial position at a given point in time. Knowing the difference can help you better understand your company’s current health and future prospects.
What is financial position?
A financial position is a snapshot of an individual or entity’s financial situation at any given point in time. It includes an overview of the assets, liabilities and equity of the entity. Financial statements are used to provide information about a company’s financial position and performance.
A financial statement can be divided into two main categories: operating statements and cash flow statements. Operating statements show how much money the company has made (or lost) during a given period, while cash flow statements tell you how much money the company has been able to bring in and spend during that same period.
What is financial statement?
Financial statement is a report that summarizes a company’s financial position and performance at a particular point in time. Financial statement includes items such as income statement, balance sheet, cash flow statement, and statement of changes in stockholders’ equity.
Comparison of financial position and financial statement
A financial statement is a report that provides information about a company’s financial condition at a specific point in time. Financial statements can be prepared in two formats, GAAP (generally accepted accounting principles) or audited. Financial position refers to the assets, liabilities, and shareholder equity of a company at a given point in time.
The main difference between financial position and financial statement is that financial statement includes information on the current status of the company’s assets and liabilities while financial position only includes information on the company’s total assets and total liabilities. Another important distinction between the two is that financial statement captures company’s performance while financial position only captures certain aspects of company performance such as debt levels and profitability.