Financial statements provide essential information about a company's financial performance and position over time. They include key elements such as assets, liabilities, equity, revenues, and expenses. Maintaining accurate financial statements allows a company to monitor its progress, identify sources of income and expenses, assess its financial performance and stability for investors, and provide information to tax authorities and creditors. They give managers and investors an overview of a company's current and future cash flows to help make informed decisions.

1. PURPOSE OF FINANCIAL
STATEMENTS

2. INT.
• Financials statements help to know your financial status is on a regular basis and
also help to provide information about performance and changes in the financial
position of a company. This statement can be used to make informed decisions
regarding the allocation of resources
• Before going into the detail of financial statements it is very important to know
about the elements of financial statements.

3. FINANCIAL STATEMENT TYPES
• Income statement or statement of financial performance
• Balance sheet
• Statement of cash flow

4. ELEMENTS OF FINANCIAL STATEMENTS
• Assets
• Liabilities
• Equity
• Revenues
• Expenses

5. PURPOSE OF MAINTAINING FINANCIAL
STATEMENTS ARE AS FOLLOWS
• Monitor the progress of the business
• The business needs to maintain good records to monitor the progress of the business.
Records can show whether your business is improving which items are selling or what
changes are needed to be made.
• Good records can help to increase the business development

6. PURPOSE OF MAINTAINING FINANCIAL
STATEMENTS ARE AS FOLLOWS
• Identify the sources of income
• Them money or property can be received from different sources. The financial statements can
identify the sources of income. The information helps to separate business from non-business
receipts and taxable and nontaxable income.
• Financial performance of the entities has been provided
• The main purpose of financial reporting is to provide the entities financial information. This
serves as a conceptual framework for all the entities who provide the financial performance of
the company.

7. PURPOSE OF MAINTAINING FINANCIAL
STATEMENTS ARE AS FOLLOWS
• Provide assistance to existing entities
• Assistance to entities has to be provided anal explain that whether they should invest in the
existing investments or which investments can be harmful to the company
• These statements are the core backbone of the company that could help the investors and also,
they could get an overview of the company’s financial performance. The investors could get the
financial assessment of the company and help them to take important decision of the company.
If the investors want to know the company’s financial stability then these statements are a
road map to provide the companies economic stability.
• The investors mostly use financial statements to provide a financial calculation of the
company.

8. TO HAVE AN OVERVIEW OF THE PROSPECTIVE
FUTURE CASHFLOWS
• This provides an overview of the future economic performance of the company. They
also give a future prediction to the investors of the company and also help them to
know about any future risks of the company.
• The potential and existing investor could use the financial statements to assess the
potential adverse effect on the company perspective on the cash flow. The
management and directors use the company’s resource effectively and efficiently.
That is the reason why there are so many disclosures require on the financial
statements

9. ADDITIONAL PURPOSES FINANCIAL
STATEMENTS:
• The creditor will get to know the creditworthy ness of the company. Evaluation of credit
score requires both financial and non-financial information. As per the perspective of
financial reports those statements contain much beneficial information to assist this.
• They also help employees in assessing the stability of the company. Employees want to
see the company that they working to run forever. They want to secure their job. If they
could assess the company’s financial statements, they will access
• Government agency can get help to assess the tax return. Corporate tax and general tax
gas to be paid by some of the entities and the financial statements have to assess
whether tax has been completely collected.
• They also help the banker to make a risk assessment. Bankers and creditors need the
entity’s financial statements to assess the ability to pay the debt.

10. WHY IS IT IMPORTANT TO KEEP A PROPER
RECORD?
• Financial records can identify the source of the receipts. The information needed to
separate business from your personal receipts and taxable and nontaxable income.
It is very important to keep a system to track all the expenses.

11. WHAT IS THE TYPE OF RECORDS?
• Property records
• Accounting papers
• Legal papers
• Inventories
• Personal and political papers

12. WHAT ARE THE BENEFITS OF FINANCIAL
STATEMENTS?
• Financial statements separate your assets from liabilities and give you a picture of
what you owe what you are bringing in.

13. CONTACT US
• Address: IBIS Hotel Building – Office Entrance 5th Floor, Office No.: 5001, Rigga
Road Dubai, P.O.Box 4647, U.A.E
• WhatsApp Only : +971 52 6922588
• +971 55 370 1232 / +971 55 2973504
• +971 55 8377872 / +971 52 1648172
• Telephone: +971 4 2500251
• Email: sales@farahatco.com