Learn how to understand Financial Statement of a company (with examples)

Author
AAHAcademy
Finance Management Course
AllAssignmentHelp Academy
  • 12 lessons
  • 6 quizzes
  • 1 week duration

1.2 Why Financial Statement is important?

AllAssignmentHelp Academy

In the previous lesson I explained why all the stakeholders would want to see the financial statement. Financial statement is one of the most important documents that are prepared by a company.

I have listed below some of the key reasons for having a financial statement:

  • Union bargaining decisions
  • Stakeholders know revenue of the company
  • Provides cash transaction overview
  • Helps know the competitive advantage
  • Helps know the losses in particular area
  • Tax reporting becomes easier
  • Helps in future investment planning for the company
  • Helps track performance of the company
  • Auditors can audit the company
  • Builds reputation if financial condition is strong
  • Backbone for financial planning and decision making
  • Aid to raise capital if financial condition is strong
  • Used in government supplies, bidding, labor contract, and others
  • Know growth trend

Now in the next lesson we will learn some of the key fundamental concepts of accounting which you will need to understand financial statements.