Objectives of Financial Statements with The help of Financial Market Strategies and Development:
The financial activities of an organizations fall under three different categories. They are operations, finance, and investment activities. The financial statement of the organization records and summarizes the financial transactions and activities in the aforesaid categories. The income statement, balance sheet, and statement of cash flows form part of the financial statement. The financial statement analysis spells out the financial health of an organization at a given point of time.
It is a measure of the financial responsiveness of the organization with respect to its shareholders Financial statement information is used by both external and internal users, including investors, creditors, managers, and executives. These users must analyze the information in order to make business decisions, so understanding financial statements is of great importance. Several methods of performing financial statement analysis exist,Financial statements show the financial performance of a company. They are used for both internal-, and external purposes. When they are used internally, the management and sometimes the employees use it for their own information. Managers use it to plan ahead and set goals for upcoming periods.
When they use the financial statements that were published, the management can compare them with their internally used financial statements. They can also use their own and other enterprises’ financial statements for comparison with macro economical data’s and forecasts, as well as to the market and industry in which they operate in. The four main types are;
- Balance sheets
- Profit and loss accounts
- Cash flow statements
- Income statements.