In the analysis of the financial environment, the company needs a lot of information. This is necessary so that the leader makes informed and reasonable decisions that affect the outcome of the organization. Financial statements are needed in order to analyze investment potential, make decisions on loans, as well as to identify the risk associated with cooperation with suppliers and customers.
At the enterprise, accounting is usually engaged in the analysis of the financial environment. Its employees collect, sort, compile documents on commercial transactions. These include:
- the sale of goods and the provision of services;
- distribution of the wage fund;
- purchase of stocks;
- other.
The financial statements include a summary of these data, their classification and generalization. Documents can be prepared every quarter, half year or once a year.
In accounting, an economic entity is considered as an organization that does not depend on the owner, procured goods, products sold and salaries paid. This distinction is very important for understanding what financial statements are and how they are prepared.
A private enterprise is usually managed by a small number of participants who are solely responsible to themselves and are responsible for the bankruptcy of their property.
Most often this is individual entrepreneurship (IP). Quite often, IP-shniki ask themselves the question: do they need to keep accounting records?
In practice, IP financial statements are generated through systematic and documented information. It is compiled on the basis of accounting statements.
An open joint stock company (OJSC) is a corporation that is managed by management. It, in turn, reports to the board of directors, shareholders, control bodies whose shares are publicly available (for sale).
OJSC
financial statements include 2 parts: income statement and balance sheet. The latter is a detailed state of the enterprise at a specific date (mainly December 31). But some organizations generate reports at the end of sales. These are mainly those that work seasonally. Profit and loss statement is a detailed account of the expenditure of cash earned (lost) by an enterprise for a certain period of time.
A limited liability company (LLC) is a corporation established by one or more persons, liable to creditors only with its declared capital. Its size is determined by law.
The financial statements of LLC are prepared by analogy with joint-stock companies. An income statement and an enterprise balance sheet compiled for a particular financial year are presented .
By comparing the organization’s documentation for several consecutive periods, you can identify growth trends or, conversely, a decline. Evaluation of reports, including detailed ones, can help a manager make decisions. A comparative analysis with its previous results and average indicators is very important for characterizing the financial condition of the enterprise.