Key Financial Statement Paper

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The Key Financial Statements of a Business

The success of business is not based on how a company is able to effectively convert material and labor into goods and services. Although it is important to ascertain whether the customers are satisfied with the delivery of the merchandise, it is important that the company is able to keep up all of its financial statements. These statements tell the story of how a certain business operates (Biery, 2013). Meaning, financial statements will ascertain the performance of the company and its corresponding value, and how matters relating to the company's success should be managed. For the purposes of this paper, the income tax statement, the balance sheet, and the cash flow statement will be discussed. …show more content…

The information included in this financial statement is the company's assets and liabilities and the accounting and finance of the owner (Shah, 2009). Through the balance sheet, a manager or an entrepreneur is able to know how much money he has to pay, or how much money does he expect to earn in his business (Shah, 2009). Clearly, the balance sheet is necessary because it gives the owner the overall picture of the financial health of the business (Shah, 2009). When owners are aware of their business' worth, they are able to come up with better management decisions which will benefit the business in the long …show more content…

I have to consider the pulse of the business so that investors are attracted to invest. I have to make sure that the revenues will allow the business to survive regardless of what crisis it will face in the future. Through the balance sheet, I am able to determine what the company owns and what it owes in each day. The information provided in the income statement will make me aware of what products the company sells and its costs over a specific period of time. Through the statement of cash flows, I am able to determine the amount of cash that comes into the business and the amount of cash that goes out for the same purpose. Through these financial statements, I am able to compare the business to others in the same market and undertake certain endeavors that would ensure that the company does not only maintain its competence in the industry, but it is also able to provide the customers’ needs and wants and at the same time, earning more profits for the success of the

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