If you have any doubts about what financial statements are , they are documents that provide visibility into the financial situation and results of a company. These reports are essential for decision-making, both internal and external.
When your results start to turn red and you see that your business is not generating enough income to cover its expenses, it is time to prepare financial statements that help evaluate profitability, liquidity, debt you have and other indicators.
How about we look at all of them? Not only number data what financial statements are , but also:
The statement of financial position
The 5 financial statements of a company
Its elements
Types of financial statements
How to make one
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What are financial statements?
Financial statements reflect how the numbers are going in your company. You can think of them as an x-ray that allows you to see how your business is doing in terms of income, expenses, assets and liabilities.
If you have a business or are thinking about starting a business and you are wondering: should I make financial statements? Well, the simple answer is that they are important to make informed decisions about your business. They help you know if you are making money, if you can pay your debts and if your business is growing.
The financial statements document is essential to understanding the economic health of a company and, at the same time, they are an obligation.
They are usually submitted after the close of the accounting year to which they refer. For example, the financial statements for the year 2024 would be submitted during the course of the year 2024. Keep in mind that just as you also make sales indicators , it is also important to make this type of documents where the economic health of your business is revealed.