Financial reporting aims to track, analyse, and report your business’s income. This helps you and any investors make knowledgeable decisions about how to manage the business.
These reports examine reserve usage and cash movement to assess the financial health of the business.
Kinds of financial reports
Profit and loss statement
Cash flow report
Statement of changes in equity
The three main goals of financial reporting
Provide information to investors
Investors want to recognise how cash is being reinvested in the corporation and how professionally capital is being used. Financial reporting assists investors in determining if your company is a suitable investment.
Track cash flow
Where does the money in your business come from, and where does it go? Is the company profitable or losing money? The answers to these are how well your business is performing and whether it can cover its debts and continue to grow.
Analyse assets, liabilities, and owner’s equity
By monitoring these and any changes to them, you can work out what to assume in the future and the growth possible for the business.
The International Financial Reporting Standards (IFRS) are a set of taxation, accounting, and legal criteria that reporting must follow. . This is so a business’s funds can be understood all over the world—a necessity with the increase of global companies and international shareholders.