A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity.
Advantages of Financial Statement Analysis:
There are various advantages of financial statements analysis. The major benefit is that the investors get enough idea to decide about the investments of their funds in the specific company. Secondly, regulatory authorities like International Accounting Standards Board can ensure whether the company is following
accounting standards or not. Thirdly, financial statements analysis can help the government agencies to analyze the taxation due from the company. Moreover, company can analyze its own performance over the period of time through financial statements analysis.
Advantages of Financial Statements
Goals financial statements are supposed to accomplish. The intent of financial statements is to provide information useful in economic decision making. In particular, the data should be useful in making investment and credit decisions. Financial statements should provide a reliable indication of a company's financial position, operating results, and changes in financial position. Also, statement components and categories should aid in decisions. Financial statements may provide information in addition to that specified by authoritative requirements and regulatory groups. Inasmuch as management knows the most about the business, it is encouraged to identify certain circumstances and explain their financial effects on the enterprise.
The advantage of financial statement is to provide the overview of the business's profitability and the financial position.