Business plan financial statements

The functioning of a business organization is entirely based on its financial statements. The management should be aware of the financial status of their company so that they can decide upon their future investments in a very careful manner. Their shareholders and creditors also act according to these sample statements. Normally, these statements are prepared by an accountant or the owner by browsing through a hundreds of documents such as the payroll distribution, the receipts of sales, the list of materials purchased and other such documents. 

These data’s are compiled, accounted and evaluated in a very efficient manner. They can be done in an annual, biannual or a quarterly basis. The "pro forma" statements are the sample statements that the investors and the lenders look forward to. They are hypothetical statements that are prepared on the basis of certain events, namely, the accounts receivable and payable, the expenditures, and the sale of revenues.

 These sample statements include balance sheets, the income statement and the cash flow statement. The balance sheet provides a plain view of the financial status of the company, whereas, an income statement deals with profits and losses. However, the important trends in these business plans are only evident when they are compared with other similar reports.

The importance of financial statement analysis

Financial statements of any company help them to keep a detailed record of their monetary status and their future prospects. These sample statements are of great use to the company, their shareholders, creditors and the managers. A financial statement though being an historical document gives a clean-cut idea about the monetary condition of the company. While a shareholder may decide whether or not to invest anymore, a creditor may feel secured or become apprehensive about the repayment of their debts. 

They may also increase or decrease their interest rates based on these sample statements.The most important use of these sample statements are perhaps for the managers of the company. Depending on these statements the managers get to know their present status and in this way they plan their investments and policies for future. Financial statements include the comparison of financial data’s of all other companies and evaluating the financial ratios. 

The sales of the company, its profits and losses are decided solely based on these statements. The method of evaluating financial statements can be different in various organizations; nevertheless, they play a substantial role in the evaluation process. The statements despite being tentative in nature speak a lot when it comes to the financial health of a company.