Financial statements

Unicorns are not born, they become!

Financial statements are a set of reports or tables that show a company’s financial performance over a period of time, usually in the form of a balance sheet, income statement, and cash flow statement.

This information is important for managers, shareholders, banks, and investors to assess a company’s financial health and prospects. Financial statements may also be required by regulators.

“It’s very important for companies to know about their money and how they earn and spend it. It will help them plan for their future and make decisions that will help them grow and become happy and successful.”

Knowing your financials is extremely important for many reasons. Here are just a small fraction of them:

Financial management: Knowing financial metrics allows companies to better manage their finances, including planning budgets, controlling expenses and prioritizing investments.
Performance Measurement: Financial metrics help assess business performance and financial productivity. This helps companies identify weaknesses and strengths, as well as identify certain trends and challenges.
Decision Making: Financial metrics are an important source of information for making decisions about various aspects of a business, including expansion.
Finlab knows where to start. We’ll help you decide on the metrics and forms of tables and reports to make it easier for you to decide.

The most useful financial statements reports depend on the needs of the users. However, in general, the following financial statements are considered to be the most useful:

1. Income Statement: The income statement shows a company’s revenues, expenses, and net income or loss over a specific period. It is useful for investors and creditors to evaluate a company’s profitability and growth potential.
2. Balance Sheet: The balance sheet shows a company’s assets, liabilities, and equity at a specific point in time. It is useful for investors and creditors to evaluate a company’s liquidity and financial health.
3. Cash Flow Statement: The cash flow statement shows a company’s cash inflows and outflows over a specific period. It is useful for investors and creditors to evaluate a company’s ability to generate cash and manage its cash flows.
4. Statement of Changes in Equity: This statement shows the changes in a company’s equity over a specific period. It is useful for investors and creditors to understand how a company’s equity has changed over time.

These financial statements together provide a comprehensive view of a company’s financial performance and position, and they are essential for making informed investment and lending decisions.