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Financial Statements - Essay Example

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Undergraduate
Essay
Finance & Accounting
Pages 5 (1255 words)

Summary

Financial Statements Abstract Financial statements represent the financial status of the firm. It is an important tool to assess the financial health of the organization for making projections based on such data. There are several individuals and organizations in the market that are directly or indirectly depended on the financial stability of the firm…

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Financial Statements

Financial accuracy and transparency is necessary for them as they would base their decision depending on the reports of the financial statement. The accurate representation of the financial statement would motivate an investor to invest, banks to lend money and the government to calculate the right amount of tax for the company. It also benefits the company by spreading their good name and increasing their goodwill in the market. Table of Contents Significance of Accurate Financial Statement for Outside Business Interest 5 Conclusion 7 References 9 Bibliography 10 Introduction The major motive behind creating a financial statement is to analyze the financial position of the company at the end of the year. It is very important to ensure that the financial statements are accurate, as the financial health of the company can be determined through the financial books of the company. It is a critical aspect for the business to create accurate statements because it is not only important for internal requirements of the company but also for the purpose of external reporting and expectation of the investors (Elmaleh, 2005, p. 105-106). The financial statements are the accounting reports which are used to communicate the financial information of the company to the external parties such as banks or the investors. ...
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