Basically, the financial statements serve as a tool to assist companies in assessing the company’s financial condition in general. Every company’s development is recorded in it. That way it can be used as an evaluation material to develop a company’s strategy in the next period. Additionally, if you feel the need to hire a professional bookkeeper, we recommend you call bondi junction xero bookkeeper.
Financial statements can provide comprehensive data or information about a company’s financial position. An overview of the overall condition of the company, especially financial condition. Good data on company assets, debt, operating costs, and others. Information about this financial condition can be used as material for evaluation and consideration in making important decisions for the company. Financial statements actually become part of the financial reporting process. It is like a puzzle piece that must be arranged to be complete.
Well, a complete financial report usually consists of several types, namely:
1. Income statement
The income statement describes the financial performance of a business entity in an accounting period. In this report, there is information about the elements of the company’s income and expenses so that it is known as a net profit or loss.
2. Report on changes in capital
The report changes in capital contain the increase or decrease in the value of capital/equity of the company in a certain period. This report can provide information on how much capital changes occur and what causes these changes.
3. Balance sheet report
The balance sheet report contains information on the financial condition of a business entity on a certain date. From this report, we can find out how many assets (assets and assets), liabilities (debt), and company equity.
4. Cash flow statement
A statement of cash flows used to show the company’s cash inflows and outflows during an accounting period. This report also serves as a cash flow accountability tool during the reporting period.
5. Notes to the financial statements
The notes to the financial statements are located in the last section. The contents include a detailed explanation related to the contents of the four supporting reports above. Generally, those who include this note are companies going public or at least large-scale companies.