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Financial statements offer a quick glimpse of the financial health of any business organization. There are different types of financial statements which includes the Profit and Loss Account statement, the Balance Sheet, the Income sheet and the Cash Flow statement.
Balance sheet provides a snapshot of the company’s financial position at any particular time. The Cash flow statement shows the movement of funds with respect to the business organization. Irrespective of the size of business, there must be sufficient cash for the business to grow and succeed.
The Profit and Loss statements indicate the performance of the company over a period of one year normally. For whom are the financial statements important and essential? Well, first and foremost the owners of the business must be aware of the financial performance of the company. Next, the shareholders and investing agencies need to have the latest financial statements to verify the investments.
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