In: Finance
What can financial reports be used for? (100–150 words)
Financial
Report- Financial report is the formal
reports(balance sheet, Profit and loss account etc) that
the company is issued to public.
Financial reports is a important tool for decision making
whether to invest in the company or not. Financial
statements include balance sheet, P&L account, notes to
accounts or futures plans the company is to be prepared for.
Financial statement shows (B/Sheet) whether the company is solvent
or not. IF the company financial statement is
audited and the auditor give the
unqualified report it will show the strength of
the company that the financial statement are prepared as per the
accounting standards.
Financial statements shows what steps are taken by the
company to increase the wealth of the shareholders.
By comparing the previous financial reports( eg-2017-2018 &
2019) whether the company has done the work which was stated in the
previous years.
Financial statement helps in understand, whether the management is
good for the company.
Management discussion analysis(MDA) is a key points to be consider
while reading the financial reports, in this points it will show
the all future plans of the company, and any mishappening appear in
the past all the declaration was given in that points by
management.
I hope this clear your doubt.
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