A financial statement template is a formal document that outlines the financial activities and position of a business, individual or any other entity. Usually, these statements are big players in the world of accounting and quantify the financial strength, performance or liquidity of an organization. These statements are used to reflect the financial effects of a business transaction and activities on the entity or individual. Generally, the financial reports are prepared by the company’s managers to represent the financial performance and position at a point in time. These statements are the basic source of financial information for most decision makers.
Importance of Financial Statement
With the help of financial statements, the management of a company can check the status and performance of financial accounts. Truly, from the value of view, a financial statement may provide a bit of information with respect to the financial value of the company. Almost certainly, a financial statement will equally help the investors and creditors to evaluate a company’s financial performance. Apart from this, a financial statement can also help the business to communicate with other entities or all the interested outside parties who are interested in knowing the current financial worth of the company, before making any investment related decision.
What Benefits Stakeholders Can Avail From Financial Statement?
The financial statement is beneficial for the shareholders because it provides a lot of information about the revenue of a company, expenses, profit, debts of the business and if they are able to meet the short and long term obligations that will be required. It provides shareholders, the financial health of the business and its cash flow. When the ratio of liquidity and solvency is found in financial statements, it helps the shareholders to see the ability of the company to repay its debts and expenses. It is also used by them to compare the result of the previous year or any competitors of the company.
Details of Financial Statement
In point of view of the general scenario, there are different types of financial statements that fully focus on diverse areas of financial performance. Moreover, these statements are used for operating results of the company, some for financial conditions, some for cash flow and others for shareholder’s equity. As per market practice, the following statements are connected with a financial statement. These are known as:
Balance Sheet
A balance sheet reflects the financial position of a company on a specific day.
Financial Expenses Sheet
A financial expenses sheet covers those areas where a company has made significant expenses, either for future earnings or for maintenance.
Cash Flow Statement
A cash flow statement defines how the cash balance at the start of the financial year is used to meet expenses during a specific period. It also includes those transactions where a company received cash.
Profit and Loss Statement
This statement reflects an overall picture of a company where anyone can see what the company invested in business (equity) and how much they earned (profit) after bearing yearly expenses.
Annual Reports
Annual reports are also included in a financial statement which supports the facts and figures. These are usually attached as important notes or supporting statements in the bottom area of a financial statement.
Templates for Financial Statement
Free Financial Expense Statement Template
Free Financial Statement Template
