Financial Statement

Financial Statements

The four financial statements are; income statements, balance sheet, statements of cash flow and retained earnings statement. Income statement shows both the income and expenses of a company. These particular areas of financial statements allow the company's income to be revised and viewed in whether the company is having expenses that aren't necessary and aren't benefiting the company, and determine whether the company is increasing in the financial income or suffering.

Financial statements are mostly intended to be understand by the reader and the reader of these are usually knowledgeable in the area so it is the company's responsibility to make this understandable to their employees. There are different kinds of users of financial statements. The users of financial statements may be inside or outside the businesses. The users of financial statements use financial statements for a large variety of business purposes and their ability to understand and analyze financial statements helps them to succeed in the business world.

The balance sheet tells potential inventors how the company is doing financially. A balance sheet can be considering a snapshot of company's liability and any ownership. A liability is any type of loan the company owes. Statement of cash flows is a summary of all the cash receipts and cash payments. Retained earnings statements outline the specific changes in periods. It's the beginning and end of earnings.

These four financial statements are useful for manager and employees because it's easier to keep the financial part in order and flowing according to the records. Basically help structure any institution dealing with any type of financial qualities having to deal with the employer corresponding to their employer's needs and expectations. Being that I myself have experienced being an employee of a financial institution I really appreciate the structure of management having the organization and the aspects of keeping everything in order.

Financial statement benefit externally for audits just to verify that the company is following regulations and working with the correct procedures, papers are being kept in order without any alteration or any type of unethical situation that can affect the business, employees and customers. It helps as verifications that regulations are being followed and has the correct licenses. It is helpful in the way that it can be realize what business are bringing a large amount of profit and which ones should be kept out of the market because instead of making money to pay any type of debts and keep in track any material that has to be updated, trainings that have to be offered its losing money without being able to complete their commitment.

["The goal is not to make decisions on whim and caprice, but to put specific personnel in charge for certain processes.