Financial Statements are summary accounting reports prepared at stated time periods to inform the owner, creditors, and other interested parties as to performance of the business. Financial Statements uses summarized data to prepare the business’s financial reports.
Financial statements have generally agreed-upon formats. There are three main financial statements:
-Trading and Profit and Loss Account
-Statement of Cash Flows
Each financial statement provides a different perspective Combined the financial statements provide a general overview of the company, the impact of its activities, its financial strength, and an overview of its cash flow. Evaluating allows directors to formulate effective strategic policies, and implement factors that will increase efficiency.