Financial statements in companies
Dear readers, the financial statements are those where the accounting records are included and where the results that have been obtained are determined, it is for this reason that its purpose is to determine the profits or losses during the accounting period. It is necessary to take into account the importance of the financial statements, since through them the equity situation of a business unit is known in depth, and in this way it is possible to make different decisions.
In this sense, Brito (2012) points out that financial statements are a representation of the financial situation and financial performance of the entity, which is useful to a wide variety of users when making decisions. In general, according to the author, we can say that the financial statements seek to show real results according to the situation in which the entity is, so it is necessary to take into account that they determine whether the company obtained profits or losses during the accounting period.
On the other hand, the same author mentions that there are 5 financial statements and through them the information corresponding to the company is obtained. Likewise, we can say that these financial statements are the following: Statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flow and finally, explanatory and explanatory notes.
As mentioned in the previous paragraph, it is important to know how to identify each of the financial statements mentioned, since each one has a different function and what they seek is to determine the situation in which the entity is at the time. In this sense, defining a little each of these statements we can say that the statement of comprehensive income is one that through its application can determine the income, costs and expenses and thus identifies the profits or losses that have been obtained.
The statement of financial position is the one that shows the assets, liabilities and capital and allows an analysis of the resources and their origin. Also, the statement of changes in equity, its function is to determine the changes that have occurred in the accounting period in order that each of the partners that make up the companies have a little more knowledge.
In the same vein, the cash flow is the one where the investment activity determines the resources that the entity has obtained at a given time either in the medium or long term. Finally, the explanatory notes are those that are responsible for explaining in detail all the events, whether numerical or not, that may be presented in the financial statements and their presentation is mandatory.
Dear readers, knowing a little about each of the financial statements, it can be demonstrated how important it is to apply them in a company since they determine all the necessary accounting procedures and thus know how the company's performance is going according to its equity. It is necessary that the company has knowledge about the liquidity in which it is since its patrimony may depend on it.
| Bibliographic references |
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Brito, J. (2012). Financial accounting adapted to the Ven¬-Niff for SMEs. Tomo II. Ediciones centros de contadores. Venezuela: Lara.
Greetings dear @amestyj although I am not an expert in the area, I think we should all be aware of this conceptual contribution applied to our everyday life.
As you rightly say "financial statements seek to show real results according to the situation in which the entity is, so it is necessary to take into account that determine whether the company made profits or losses during the period. accounting period" more than applied to companies is ideal to apply it to our rite of life and thus evaluate the efficiency of the process. Thank you for your contribution
Greetings my dear friend @madridbg I am glad that the writing can be understood, as you say the financial statements allow us to see the real financial movements that have been made in the company, it is a kind of complete x-ray of the business.
hello @amestyj,
Financial statements should be a priority not only for companies but also for individuals because when we analyse the numbers it will tell us whether the entrepreneur is on the right track or whether the finances are going from bad to worse.
Hello friend @trabajosdelsiglo, I share your opinion he financial statements also happens to be carried even in the control of the home, this way we can get to know if we properly manage our resources.
Greetings friend @amestyj, The financial statements can help us determine the economic results of a certain company, having knowledge of the financial statements to determine whether or not the company is profitable to bring its income and expenses at the end of the month, do the comparative study How profitable can make the investment we are making, of course this is from my point of view. Thanks for sharing your article.
Greetings friend, thank you for your valuable opinion, without a doubt, as you rightly mention, the financial statements allow us to make important decisions in the company in search of profitability through the results obtained.
Greetings friend. For a company the financial statements are essential, as they are the resource that allows them to have a clear view of the finances and the overall situation of the company in a given period, keep proper control of them is the only way to have control of the accounting of your business, and know if the finances are healthy or make the necessary corrective actions in the financial statements, and if the company is in good financial condition.
Greetings friend @emiliomoron, excellent contributions, I completely agree with you, because in short the financial statements allow us to identify if there is any financial problem in order to make the necessary corrections.
Greetings dear friend @amestyj.
An excellent content that you share with us in this opportunity, this type of material for me is of great importance because it allows us to know essential conceptual aspects in the business world and even in aspects of our daily performance, it is important to highlight what you express:
Thank you friend for sharing such educational content with all of us, many successes. Best regards.
Hello my dear friend @rbalzan79, thank you for your valuable contribution, it is undoubtedly a fundamental tool to diagnose some flaws in our finances, since our goal is to preserve our patrimony.
Financial statements are a very helpful guide for a company, it helps them identify the places where they stand as well as the point of growth and failures they have been able to attain.
Hello friend, you touched on an important aspect that we can diagnose with the financial statements, and this refers to the fact that we can see if the company is growing and if not, we can take the necessary corrective measures.
Greetings friend @amestyj, Financial Statements can be considered as the backbone of any company, since through them we can determine everything that happened in 1 fiscal year within the company (referring to 12 months of economic activity) and it is not necessary that it coincides with the normal Calendar year, they are also mandatory, since they are established in the standard as such, and give us an accurate idea of the situation that the company is going through.
Very good information, best regards.
Greetings @chucho27 I find your contribution excellent and very technical of course, I know you have extensive knowledge about it, I agree with you when you mention that it is the backbone of a company, it shows us the reflection of what we have done with our economic resources.
Greetings Friend @ amestyj. Excellent explanation of the financial statements as these are indispensable to be able to make decisions of any kind in the company. Each one in particular determines relevant information for management ranging from income (sales) to tax payments.
Thank you very much for sharing.
Greetings my dear friend @dgalan, keeping financial statements allows us as you mentioned to make timely decisions in case we need to correct any financial deficiency that may put our capital at risk. Thank you for your valuable comment.
Understanding cash flow, income and outcome strategy will really help a business know where it stands , it is a good thing for businesses to always have a proper financial record as it will help the business understand it's position financially and other areas.
Hello friend, I consider financial statements important precisely because of what you mentioned, which is nothing more than knowing the financial position of our business. Thank you for your valuable comment.