Financial Statements
/faɪˈnænʃəl ˈsteɪtmənts/
Financial statements are formal records that summarise a company's financial activities, performance, and position over a specific period.
Financial statements are formal records that summarise a company's financial activities, performance, and position over a specific period.
Financial statements are standardised documents that present your company's financial health through numbers and data.
They include your profit and loss account, balance sheet, and cash flow statement.
These statements follow specific accounting standards to ensure consistency and comparability.
Companies use financial statements to comply with legal requirements and demonstrate transparency to stakeholders.
They're mandatory for most limited companies and must be filed annually with the company registry.
These documents also help investors, lenders, and business partners assess your company's financial stability.
Financial statements are typically prepared by qualified accountants using your company's accounting records but a competant director can also do it.
The process involves gathering transaction data, applying accounting principles, and formatting the information into standardised reports.
Most companies prepare these statements annually, though some create them quarterly for internal monitoring.
Financial statements show your company's revenue, expenses, assets, liabilities, and equity.
The profit and loss account reveals whether you made money, whilst the balance sheet shows what you own and owe.
The cash flow statement tracks money moving in and out of your business.
Financial statements must be submitted to the company registry within specific timeframes after your accounting year ends.
The exact deadline varies depending on your company type and jurisdiction.
Late filing typically results in penalties, so maintaining accurate records throughout the year is essential.
Financial statements provide crucial data for strategic planning and operational decisions.
They help you identify profitable areas, spot potential cash flow issues, and demonstrate growth to potential investors.
Banks and suppliers often request these statements when considering credit applications or partnership agreements.
