Overview of financial reports

1. FINANCIAL REPORTS
Inspired Leadership – Business Acumen

2. Financial accounts are concerned with classifying,
measuring and recording the transactions of a
business.
At the end of a period (typically a year), the following
financial statements are prepared to show the
performance and position of the business:

3. Profit and Loss Account
/ Income statement
◦Describing the trading
performance of the
business over the
accounting period

4. Balance Sheet
◦ Statement of assets and
liabilities at the end of an
accounting period

5. Cash Flow Statement
◦Describing the cash
inflows and outflows
during the accounting
period

6. Directors’ Report
◦ Description by the Directors
of the performance of the
business during the
accounting period and other
disclosures, particularly in
relation to directors'
shareholdings, remuneration
etc.

7. Financial Accounts are geared towards external users
& need to provide answer to questions like:
SHOULD I INVEST MY
MONEY IN THIS COMPANY?
SHOULD I LEND MONEY TO
THIS BUSINESS?
WHAT ARE THE TAXABLE
PROFITS?

8. Every registered company must give
a fair and true reflection of its
annual financial performance:
 A directors’ report
 An audit report
 A profit and loss account
 A balance sheet
 A statement of total recognised gains/losses
 A cash flow statement
 Notes to the accounts