Financial statements are important in providing information about the financial position, performance and changes in financial position of a business that is useful in making economic decisions. They are useful to many users such as Owners, Managers, Shareholders, Prospective Investors, Banks and Inland Revenue.
As the Owner or Manager of the business, Financial Statements should be used to assess the company's financial performance and position in helping you make important business decisions. You will also need to present your Financial Statements to your Shareholders who will be assessing the risk and return of their investment in the company and may make investment decisions based on their analysis. If you are the Owner and Shareholder of your business, then it is important for you to wear both hats when assessing your Financial Statements.
If you are looking for Prospective Investors, they too will be interested in your Financial Statements to assess the viability of investing in your company. Investors may predict future dividends and risks associated with the investment. If you are looking to borrow money, Banks and other Financial Institutions will use your Financial Statements to decide whether to grant you a loan or credit.
Governments require Financial Statements to determine the correctness of tax declared in the tax returns. Government also keeps track of economic progress through analysis of Financial Statements of businesses from different sectors of the economy.
As a business owner, your understanding of your Financial Statements is crucial for the growth of your business. As your Accountant, WE believe WE have a part to play in that. WE want to help you to understand what the numbers in your Financial Statements mean, so you can make better informed decisions about the running of your business, uncover potential risks and help with the essentials like cashflow and business growth.
If you don't understand your Financial Statements, perhaps you should give WE a call! 09 3789207