Financial Statements Paper Essay Example for Free

Financial Statements Paper EssayThe statement usually includes beginning balance, brighten income for the current cycle, dividends disclosed in the current period and ending balance. Balance sheets detail assets and claims to assets at a distinct point in time. Claims of creditors and claims of owners ar examples of claims to assets. This point statement volunteers a clear outline of the financial standing of the company as a whole. The direct function of a statement of cash fertilise 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 useful to managers as these statements are utilized to measure the cognitive operation of the organization. Sales and expenses are compared to the income statements from previous periods by commission to pin point 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 fo r a return in the property they have invested, usually in the form of stocks, as they seek increases in stock value and profitability.Lending decisions to be made by creditors are base upon the financial statements. The creditors want to ensure that the companies they are lending the funds to have the ability to manage its finances so they are not at happen of not being able to pay back its debts. References Kimmel, P. D. (2009). Financial Accounting Tools for Business Decision Making (5th ed. ). Retrieved from The University of Phoenix eBook Collection database..