Can you really understand financial statements?

• Main Author: Paril, Alloysius Joshua
• Format: text
• Published: Animo Repository 2017
• Subjects: business; accounting; Accounting; Business
• Online Access: https://animorepository.dlsu.edu.ph/res_cbrd/23; https://animorepository.dlsu.edu.ph/context/res_cbrd/article/1037/viewcontent/DLSU_CBRD_Business_Notes_and_Briefings_Volume_5_Number_5.pdf
• Institution: De La Salle University

Financial statements are an interesting species, if I may say. In those several pages, an entire picture of an entity is painted, at least in the financial aspect. As almost everyone knows, financial statements give us an idea of a company’s performance during a particular period and condition as of a specific date. These documents are able to summarize everything that happened to a company during a 12-month period—probably more efficient than any document could. Needless to say, these documents enable its users to decide on what to do with respect to that company. Investors take a look at financial statements to evaluate if the money they put in that company is still worth keeping. Creditors use financial statements to confirm if they could extend their credit to that company. The government mainly decides on the amount of tax that the company owes it. Employees—current and prospective—may want to look at it to see if the company is still stable and would be able to support them.