What is financial statement and its objectives

Financial statements are a group of significant reports that summarise an organisation's financial performance, financial condition, and cash flows. The main objective of financial statements is to provide information about the economic resources and obligations of a business.

What are the objectives of financial statements?

The main objective of preparing the financial statement is to present a true and fair view of the financial performance and position. Accounting data is summarised in such a way that the profitability of the business is clearly visible. It also serves as an information tool for all the parties concerned with the firm.

What is the meaning of financial statements?

Financial statements are a collection of summary-level reports about an organization's financial results, financial position, and cash flows. They include the income statement, balance sheet, and statement of cash flows.

What are the three objectives of financial statement analysis?

(i) To assess the earning capacity or profitability of the firm. (ii) To assess the operational efficiency and managerial effectiveness. (iii) To assess the short term as well as long term solvency position of the firm.

What is financial accounting and its objectives?

In a practical sense, the main objective of financial accounting is to accurately prepare an organization's financial accounts for a specific period, otherwise known as financial statements. The three primary financial statements are the income statement, the balance sheet and the statement of cash flows.