What is a Financial statement?
A financial statement is a document or set of documents that presents an organization's financial performance and position at a specific point in time. Financial statements typically include a balance sheet, an income statement, a cash flow statement, and a statement of changes in equity.
Financial statements are summary reports of the financial transactions of the business. It represents the financial health of the business. These reports are prepared for business owners, promoters, investors, stakeholders, and creditors to take future decisions regarding investment or expansion.
Financial statements assist in determining the business’s liquidity and debt repayment capacity. It is also used to compare it to other businesses in order to understand profitability trends and industry competition.
When a business owner applies for a loan for an existing business, the lender requests the financial statement first because it provides a rough idea of where the business stands. A financial statement typically consists of a balance sheet, income statement, cash flow statement, and supplemental notes and schedules. Business owners use a financial reporting framework in accordance with industry standards when issuing financial statements to outside users. Representation may differ from one industry to the next.
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Financial statements represent the health of a business, and it is important to have accurate financials for investment and tax decisions. Are you a small business owner and do not have a need for monthly statements? We can help you by preparing financial statements as per your needs.
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