A financial report gives stakeholders comprehensive data regarding a company’s business performance. Whether used for reporting, forecasting, or planning, this information is key to understanding a business’s current operations and future growth potential.
While providing information, a well-structured financial report also aids decision-making by making it easier for users to understand the numbers. The most effective reports are clear, concise and organized, with visual aids and appendices that provide more detailed information that can’t fit into the main body of the report. Finotor’s reporting tools can help you structure a user-friendly format that speaks volumes about your business’s financial narrative and enhances understanding of complex data.
The most essential section of any financial report is the balance sheet, which lists a company’s assets (e.g. cash, marketable securities, accounts receivable, property, etc.) and liabilities (e.g. debt, loans payable) at a specific point in time. It also classifies assets and liabilities as current (expected to be converted to cash or paid within one year) or noncurrent.
Another important component is the income statement, which breaks down sales revenue, operating expenses and profit/loss on a monthly basis. Comparing budgeted figures with actuals provides an accurate snapshot of a company’s current financial health and can highlight areas that need to be addressed to keep the business on track for growth. It’s critical to have consistent reporting periods when preparing these reports, as this allows for more accurate tracking and comparisons over time.