Importance of Economic Statements

 Importance of Economic Statements Essay

Economic statements, also referred to as financial studies, record the financial activities of a organization in short and long term. The four financial statements will be: balance sheet, salary statement, affirmation of stored earnings, and statement of cash flows. An equilibrium sheet information the resources, liabilities, and net equity on a company. An income statement reports income, expenses, and profits on the company. An argument of stored earnings reveals a industry�s changed maintained earnings. The statement of cash flows shows a provider's cash flow actions, such as working investing, and financing activities (" Monetary statements”, 3 years ago, para. 1). Financial transactions are very crucial to a company. You will find major reasons of financial transactions and the sort of information they provide is very important. According to " Financial statements”, " 'the objective of economic statements is always to provide advice about the financial power, performance and changes in budget of an enterprise that is helpful to a wide range of users in making economical decisions'” (2007, Purpose of financial statements, afin de. 1). " Financial transactions should be understandable, relevant, dependable, and comparable” (" Economic statements”, 2007, Purpose of economical statements, em virtude de. 1). They are directed toward people who understand business and economic actions and accounting (" Financial statements”, 2007, Purpose of financial statements, pra. 2). " Owners and managers need financial statements to make significant business decisions that impact its ongoing operations” (" Financial statements”, 2007, Reason for financial statements, para. 2). " These statements are also used within management's twelve-monthly report to the stockholders” (" Financial statements”, 2007, Reason for financial assertions, para. 2). However , " employees also need these reviews in making communautaire bargaining negotiating (CBA) while using management, in the case of labor unions or for those...

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