Professional Documents
Culture Documents
Presented By,
• Pushkar Pathak (37)
• Aaloka Patil (38)
Introduction
• Financial statements are essential tools for portraying the
summarized picture of the financial and economic
condition of the firm based on the data that a firm has
collected in its books of the accounts.
• Financial statements are based on financial accounting
and they are said to be the end product of financial
accounting. They are considered to be the most effective
vehicle of communication between the persons managing
the affairs of the company and the outside world
(including the shareholders who are the owners of the
company ).
• “FINANCIAL STATEMENTS ARE THE BLUE PRINTS OF THE
FINANCIAL AFFAIRS OF THE BUSINESS ENTERPRISE.”
Functions
1) They provide information on how the firm has
performed in the past and what is its current
financial position.
2)They are convenient device for
stakeholders(shareholders, creditors, regulators, &
others) to set performance norms and impose
restriction on the management of the firm.
3)They provide useful templates for financial
forecasting and planning.
TYPES OF FINANCIAL STATEMENTS
• The Balance Sheet
• Profit And Loss Account
• Common Size Financial Statement
• Comparative Profit And Loss Account
• Comparative Income Statement
BALANCE SHEET
• “The Balance sheet is a statement which
reports the values owned by the enterprise
and the claims of the creditors and owners
against these properties.”
PROFIT & LOSS A/C
• “The summary of the changes in owners claim
or equity representing from operations of a
period of time, properly arranged, is called the
Profit & Loss statement.
COMPARATIVE FINANCIAL
STATEMENT
• CFS helps a financial analyst in horizontal
analysis of the firm & in establishing operating
& positional trend of the firm.
• Types of comparative statement:
• Comparative Income Statement
• Comparative Balance Sheet
Comparative Income Statement
Particulars 2010 2011 Change in % change in
2011 2011
2) Decision Making
3) Forecasting
Thank You