Financial Statements And Financial Statement

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1. Financial Statements: Are a planning document, but when results come in it becomes a controlling document. It is the formal record of financial activities, and it measures the performance of the organization. Stalk holders and investors see this document before investing in the organization. They are a summary of monetary data about an enterprise. Financial statements are very important for manufacturing company as it helps in assessing the financial condition of the company. It also helps the manufacturing company in making financial plans. A manufacturing company can make a better decision regarding a product by analyzing the financial statement. Through financial statements a company can decide whether it have to increase its sales or it have to reduce its cost. Manufacturing companies often have substantial investment in fixed assets such as machinery, equipment’s and buildings, so financial statements help them analyze the worth of their assets. It also helps the manufacturing company in analyzing the depreciation of the assets. Financial statements are also very important for Service Company. It helps them in analyzing the operating revenues and operating expense. In a retail service company, it helps in determining the credit offered to the customer which helps in determining the account receivable of the company. Just like manufacturing company, it also helps the service company in determining and analyzing the depreciation of the fixed assets. 2. Balance Sheet: Is a firms snap shot that tells what organization owns, owe, and equity. It is a statement about the assets, the liability and the capital of the organization at a particular point in time. It gives detail information about income and expenditures over the cont... ... middle of paper ... ...roles to management according to their expertise and skills. No organization can work effectively without defining the roles of its management. 14. Organizational Vision, Goals, and Objectives: Vision is a concept of manager about the desirable future of an organization. Goal is a purpose towards which efforts are made or endeavors are directed. While, objective is an aim which organization tries to achieve. All of them are the strategic target that a company’s management establishes to outline expected outcomes and to guide the employees effort. They are very important for both manufacturing and Service Company. In a manufacturing company, the target can be to produce certain amount of goods during a specific time period. If a manufacturing company doesn’t set that target, then its employees would waste time as a result the performance of the company will go down.

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