October 19th 2014
In today’s business age financial statements are not only very important to a business for tax and record reason they have also become a very useful tool for the business owners. They can help you determine how well your business is doing from month to month and help you keep track of basically anything you would want to know going on finically inside of your business.
There are four different types of financial statements there are balance sheets, which gives the information about a businesses assets, liabilities and the share holders equity. There are income statements which will tell you how much your company or business has made over a certain amount of time whether it is yearly or monthly they offer different timeframes. Then there are cash flow statements, which helps track the inflows and outflows of cash throughout the company. These are important because of the fact that you can then tell how much money you have for expenses. And finally there is the statement of shareholder’s equity and what this statement does is it changes the equity of the balance sheet, and is usually included with income statements just to show the changes in equity.
Now these statements are important to investors and managers, If I was an investor I would want to know how much the business is brining in monthly, what improvements may need to be made to the business and how much those renovations would cost. And then I would want to know it's daily day-to-day cost from payroll to rent anything that may cost me money. And these statements could help me answer those questions before investing.
If I were a manger I could use this information to answer questions how much is my company bringing in each month, what products should we keep, what should we get rid of. What are my expenses look like? I could make sure that all my employees are getting paid and are paid the correct...
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