Financial

statements
Prepared by
Asst. Prof. Rasika Naik
Key Points
• Meaning of Financial Statements
• Importance and objectives of Financial Statements
• Components of Financial Statements
 Meaning of Financial Statements

• These are compilation of financial data,

arranged and organized in a systematic and
summarized manner according to the
accounting principles, to assess the financial
position of an enterprise.

• Financial statements are written records that

convey the business activities and the financial
performance of a company. Financial statements
are often audited by government agencies,
accountants, firms, etc. to ensure accuracy and
for tax, financing, or investing purposes.
 Importance of Financial statements
• Importance to Management
• Importance to Bankers
• Importance to Shareholders
• Importance to Researcher
• Importance to Government
• Importance to Creditors & Suppliers
• Importance to Trade Unions
• Importance to Customers
• Importance to Stock Exchange
• Importance to Investor
• Importance to Regulatory Authority
Objectives of Financial Statements
• States the accurate position of assets and liabilities
• Predict the company’s earning capacity
• Depict the effectiveness of company’s management
• Know the accounting policies
• Know the cashflow position of company
• Know social impact of the business
Components of Financial Statements

Financial
Statements

Statement of
Income
Balance sheet changes in
Statement
financial position

Fund Flow Cash Flow

Statement Statement
 Thank you
https://youtu.be/UXwvIUmMXvY
https://www.moneycontrol.com/financials/infosys/balance-sheetVI/IT#I
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