Financial statements of enterprises

During the analysis of the financial environment, the enterprise needs a lot of information. This is necessary for the manager to make informed and reasonable decisions that affect the result of the organization's activities. Financial reporting is needed in order to analyze the investment potential, make decisions about lending, and also to identify the risk that is associated with cooperation with suppliers and customers.

At the enterprise the analysis of the financial environment is usually carried out by the accounting department. Its employees collect, sort, summarize documents on commercial transactions. These include:

- sale of goods and services;

- distribution of the wage fund;

- purchase of stocks;

- Other.

The financial statements include a set of these data, their classification and generalization. Documents can be prepared every quarter, half a year or once a year.

In accounting, an economic entity is considered as an organization that does not depend on the owner, the purchased goods, the products sold and the wages paid. This distinction is very important for understanding what financial reporting is and how it is drafted.

A private enterprise is usually managed by a small number of participants who are solely responsible to themselves and are responsible for bankruptcy with their property. Most often this is individual entrepreneurship (IP). Quite often, "IP-Shniki" are asked the question: do they need to keep accounting?

In practice, the financial reporting of individual entrepreneurs is formed through systematic and documented information. It is compiled on the basis of accounting statements.

Open Joint Stock Company (OJSC) is a corporation that is managed by management. It, in turn, reports to the board of directors, shareholders, control bodies, whose shares are publicly available (for sale).

The financial statements of the OJSC include 2 parts: a profit and loss account and a balance sheet. The latter is a detailed state of the enterprise on a certain date (mainly on December 31). But some organizations form reports on the completion of sales. Basically, these are those that work seasonally. The profit and loss account is a detailed accounting of the expenditure of funds earned (lost) by the enterprise for a certain period of time.

A limited liability company (LLC) is a corporation organized by one or more persons that is responsible only to its creditors with its declared capital. Its size is determined by law.

The financial statements of the LLC are compiled by analogy with joint-stock companies. A profit and loss statement and the balance sheet of the enterprise are prepared for a certain fiscal year.

Comparing the organization's documentation for several periods in a row, you can identify trends for growth or, conversely, to a decline. Evaluation of reports, including detailed ones, can help the manager in making decisions. Comparative analysis with its previous results and average indicators is very important for characterizing the financial condition of the enterprise.