Types of Financial Reports
Balance Sheet
The Balance Sheet is a statement of the company’s financial health at a given/stated point in time. It shows the assets and liabilities at the date of the statement.
From this information, ratios can be calculated which help analyse the company’s performance, for example how quickly suppliers are paid, assets compared to sales, liabilities compared to purchases, and so on.
Income Statement
The Income Statement shows the income and expenditure of the business for a given period and from this it calculates the profit or loss for that period. This was previously known as the Profit and Loss (P&L) account.
Cashflow Statement
The Cashflow Statement shows the cash movements for a given period, and gives an opening and closing balance.
Management report
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Management Reports come in many formats and can contain different information. They are used to inform the management of the company of their performance against their objectives and help them to make the most effective decisions to run the business. Management Reports can also be used to provide essential information for shareholders, funding providers or any other stakeholders in the business.
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Budget
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A Budget is a financial plan for upcoming periods, typically the next year, but can be extended for longer. However, the further ahead the budget, the less accurate it is likely to be. It shows the income the business is expecting to bring in and the expenditure necessary to achieve that. Once the Budget has been produced, decisions concerning levels of investment into the company, growth plans and any funding needs can more easily be assessed.
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Cashflow Forecast
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A Cashflow Forecast looks at the likely cash incomings and outgoings over a set period of time. This document sits well alongside the Budget to ensure that there is enough money to achieve required objectives and that any short or long term funding requirements can be identified.
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