A financial report is a document that compiles and presents your company’s financial data in a clear, understandable way. It helps stakeholders like investors, banks and tax authorities make informed decisions about your business’s finances. It also allows you to identify and address any issues your business may face, such as cash flow problems or an inefficient sales pipeline.
The key components of a financial report include an income statement, a balance sheet and a cash flow statement. The income statement shows your revenue, expenses and net income for a given period of time. The balance sheet includes your assets, including cash, marketable securities and inventory, as well as your liabilities, such as debts and accounts payable. The cash flow statement displays the movement of money in and out of your business, such as when you pay suppliers or borrow money from investors.
The most important aspect of a financial report is its accuracy. Be sure to review and reconcile all of your company’s financial information to ensure that all of the data is correct. Also, limit the amount of information included in your report so that it doesn’t overwhelm readers. It’s a good idea to use visuals, such as charts and tables, to help clarify complex numbers. Finally, be sure to include an executive summary that outlines the report’s purpose and key findings. This will save you time and help you engage your stakeholders.