Why is Financial statements important to business? - a financial statements is important to control and manage our finances well inbusiness or family, without financial statements, then we will find it hard to know where the adverse financial or beneficial to us. Many ways can be done to make the financial statements. One of the simplest is to set up a monthly accounting report and details of current routine and out of our finances. Even that for beginners.
Financial statements play a significant role in a collective bargaining agreement (CBA), that is, a mechanism that allows employers and employees to reach an agreement regarding rights and duties of workers. For example, a labor union delegate may show available cash balance to top management and explain that the corporation may not experience liquidity needs if benefits were increased by a certain amount. At regular period public companies must prepare documents called financial statements. Financial statements show the financial performance of an company. They are used for both internal-, and external purposes. When they are used internally, the management and sometimes the employees use it for their own information. Managers use it to plan ahead and set goals for upcoming periods. When they use the financial statements that were published, the management can compare them with their internally used financial statements. They can also use their own and other enterprises’ financial statements for comparison with macroeconomical datas and forecasts, as well as to the market and industry in which they operate in. Accounting is considered to be one of those complicated yet necessary chores that keep people’s financial affairs relatively clean. For the beginner who is just getting started, the process may not be the first obstacle. Often, it is understanding the special language used by accountants and those that