A financial report is a document that gives insight into your company’s finances. It helps investors, stakeholders and management assess the company’s performance, position and cash flow. Financial reporting standards – such as International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP) – create a legal framework that ensures consistency, accuracy and credibility in reporting.
Whether you need to make payments to suppliers, set competitive prices for customers or establish creditworthiness with creditors, the financial analysis of your business will help you improve efficiencies, increase profits and meet regulatory requirements. You can then use this data to refine strategy and attract investment or debt financing.
Financial reports can be complex, but with clear structure it’s easy to convey insights to your audience. Start with a summary financial report that provides a high-level overview of key metrics, including revenue, expenses and cash flow. Follow this with a detailed income statement that calculates revenues and expenses for the reporting period. Finally, include a balance sheet that shows the company’s assets (e.g., cash, accounts receivable) compared to its liabilities and equity at a given point in time.
A statement of change in equity tracks shifts in shareholder value over a period and is an important element of your business’s financial health. This statement details retained earnings – earnings that are not paid out as dividends to shareholders – and reveals how the company is using its capital to drive growth and maintain financial stability.