What is mean by Financial Statements? (Definition)

The financial statement is the statement of profit and loss account, balance sheet, etc. Here are the definition and some advantages of it...

Financial statements are the means of identifying, measuring, and communicating financial information to the persons or organizations interested in the company. The financial statement involves an income statement or profit and loss account, balance sheet, retained earnings, and balance sheet. It mainly involves profit earned or loss suffered and the overall financial position of the organization for an accounting period. The interested organization involves all investors, lenders, customers, creditors, and employees.

Some of the financial Advantages are:

It helps to measure short and long-term financial positions.
It forecasts the budget and future line of action.
Helps to provide financial useful information for decision making.
More efficiency of a business through the balance sheet.

Financial statements are also known as Historical documents because it provides the financial statement of the past.

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