Active Financial Reporting

Since the banking royal commission, how your financial reports are presented is critical for getting finance.  The presentation and strength of these reports will be an influencing factor in the success or failure of any finance applications and the growth of your business. An essential reporting tool of your business, these reports are used to track, analyse and report your business income allowing you or a potential investor to make informed business decisions regarding the future management of your business.

These reports are essential if you are looking to invest in a business. Without accurate financial reports that are verified and analysed by a qualified business accountant you may be putting your future financial success and that of your business at risk. With experience and attention to detail, your reports will be expertly prepared at Alan Porter & Associates.

 

What financial reports do businesses need?

The Main Financial Reports are -

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BALANCE SHEET.

A balance sheet provides a summary of a business at a given point in time broken down into assets, liabilities and owner's equity.

Internally the balance sheet will give insights into a company’s success or failure. After review, informed decisions can be made on the direction and future of the business. This knowledge allows the business to future-proof its business,  potential investors are able to glean an insight into the resources of a business and consider its liquidity and profitability and to consider the debt to equity ratio. The balance sheet may be used by external auditors to ensure the business is legally compliant.

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INCOME STATEMENT

The income statement is another financial statement that shows the business’s income focusing on four key items—revenue, expenses, gains, and losses. The income statement can provide insights into the overall management of the company.

Although the income statement primarily provides information regarding profitability expenses and business activity, it can also be useful in comparing the overall business activities to those in other businesses and further business opportunities. It is also valuable when addressing different business sectors and their growth or market decline.

 

CASH FLOW STATEMENT

The Cash Flow statement is distinct from but works in conjunction with both the balance sheet and the Income statement and is used primarily to show how changes in the balance sheet affect the cash and cash equivalents. This analysis is divided and presented as cash from operating activities, cash from investing, cash from financing and includes the disclosure of non-cash activities investing and financing.

The analysis of the Cash Flow statement is a way to measure the liquidity of a business – is there enough cash generated to pay expenses – a positive cash flow. In most cases the more positive the cash flow the healthier the business. In some cases, however, a negative cash flow may simply be the result of the business expanding its operations.