Financial Statements Paper Essay Example for Free

Financial Statements newsprint EssayThe statement usually includes beginning balance, net income for the current cycle, dividends disclosed in the current current and ending balance. Balance sheets detail assets and claims to assets at a distinct point in time. Claims of creditors and claims of owners atomic number 18 examples of claims to assets. This item statement provides a clear outline of the financial standing of the company as a whole. The demand function of a statement of cash flow is to present financial information such as cash receipts and payments during a set point in time.This assists investors and creditors to analyze a companys financial position.. These statements address a companys financing, investment and operational activities. Financial statements are effectual to managers as these statements are utilized to measure the performance of the organization. Sales and expenses are compared to the income statements from previous periods by counseling to pi npoint possible problematic areas. Major variations adjure management to thoroughly understand what the causes of those changes are.Variations in liabilities and assets are examined on the balance sheets from one cycle to the next. Any large variations need to be identified, explained and reasons established to whether the variations benefited the company, or caused a loss as consequences of problems. From this point management can make adjustments to correct any problems, or future planning, so these losses or problems do not repeat again. The benefits can be capitalized upon as well.Financial statements are useful to employees for the reason of collective bargaining, discussing compensation, and ranking. Employees also use this information as a means to determine the ability of the company to provide retirement benefits and opportunities for advancement. Financial Statements are useful to investors as they hold an interest in the profits of the company. The investors are looking f or a return in the funds they have invested, usually in the form of stocks, as they seek increases in stock value and profitability. bestow decisions to be made by creditors are based upon the financial statements. The creditors want to ensure that the companies they are lend the funds to have the ability to manage its finances so they are not at fortune of not being able to pay back its debts. References Kimmel, P. D. (2009). Financial Accounting Tools for Business Decision do (5th ed. ). Retrieved from The University of Phoenix eBook Collection database..