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Financial Statements and Balance Sheets Essay

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Updated: May 8th, 2021

Financial statements of a company offer crucial details regarding its monetary status. They are generated from daily bookkeeping that shows the movement of funds into and out of the company. Details on the financial statement ensure that there are benchmarks and views that assist a company in making important adjustments and determining its overall course (Osadchy & Akhmetshin, 2015). This goes a long way towards helping a company to make decisions concerning expansion and funding. Financial statements shape marketing approaches by offering data that indicates the factor of a company’s operations that yield a high return on investment.

A balance sheet establishes the monetary health of a company at a given instance. The list of assets shows what the company owns, for instance, the available cash and banked amount. The liabilities denote all the things that the company owes, for example, unpaid bills (Lachmann, Stefani, & Wöhrmann, 2015). One crucial aspect of a company that is included in a balance sheet is its net worth, its value when the liabilities have been deducted from assets (Cao, Chychyla, & Stewart, 2015). Cash flow projections map the expected income and expenses in the course of a forthcoming period. It is a fundamental planning tool that assists the company to expect and prepare for possible revenue deficits through conserving resources or soliciting funds.

Financial statements of a company operate jointly to give details concerning its financial status. When the loss and profit statement indicate that the company is making a profit while the cash flow and balance sheet statement demonstrate otherwise, it is probable that the company’s profits are gradually increasing. Information on financial statements makes sure that some benchmarks and practices enable a company to make the necessary operational changes and determine its overall position.

References

Cao, M., Chychyla, R., & Stewart, T. (2015). Big data analytics in financial statement audits. Accounting Horizons, 29(2), 423-429.

Lachmann, M., Stefani, U., & Wöhrmann, A. (2015). Fair value accounting for liabilities: Presentation format of credit risk changes and individual information processing. Accounting, Organizations and Society, 41, 21-38.

Osadchy, E. A., & Akhmetshin, E. M. (2015). Development of the financial control system in the company in crisis. Mediterranean Journal of Social Sciences, 6(5), 390-393.

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IvyPanda. (2021, May 8). Financial Statements and Balance Sheets. Retrieved from https://ivypanda.com/essays/financial-statements-and-balance-sheets/

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"Financial Statements and Balance Sheets." IvyPanda, 8 May 2021, ivypanda.com/essays/financial-statements-and-balance-sheets/.

1. IvyPanda. "Financial Statements and Balance Sheets." May 8, 2021. https://ivypanda.com/essays/financial-statements-and-balance-sheets/.


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IvyPanda. "Financial Statements and Balance Sheets." May 8, 2021. https://ivypanda.com/essays/financial-statements-and-balance-sheets/.

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IvyPanda. 2021. "Financial Statements and Balance Sheets." May 8, 2021. https://ivypanda.com/essays/financial-statements-and-balance-sheets/.

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IvyPanda. (2021) 'Financial Statements and Balance Sheets'. 8 May.

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