Assessing your company’s performance is essential; nothing can reflect it better than financial statements. Whether you use these statements for internal or external decisions, they will help you on various fronts. Besides internal company management, financial statements are also important for other parties like investors, creditors, and government bodies. Therefore, making accurate financial statements is crucial as it can define your company’s image and values. This post will explain who can be interested in your financial statements and why they seek them. Keep walking with us if you want to know more about these parties.
Interested parties in your financial statements:
Financial statements reflect assets and values, and everyone is interested in them. The internal parties and external parties will also ask for these papers when you attempt to strike a deal with them. For instance, these statements will help you while borrowing a loan from a creditor, or a new investor will assess them for performance. Here is a list of parties who can be interested in your financial statements. Let us explore the list quickly!
1. Company Management:
Your company management always seeks useful insights and information to make informed business decisions. Nothing will help them more than accurate and up-to-date financial statements as they reflect useful information and statistics. These numbers can be used to assess the past and set future plans that align with the overall corporate existence of your company.
Your company’s financial health and assets will help the management compare its performance against industry standards. Moreover, the income and equity statements are also necessary for eyeing the revenue and income from the investments. Providing management with accurate numbers will help them create robust financial and corporate policies that can take your business to the next level!
Shareholders are a business’s owners and will ask for the financial statements anytime. Providing accurate and up-to-date information will help them assess whether their funds are safe. The annual general meeting (AGM) is probably the best occasion to share and discuss these statements with shareholders. These statements will help them understand how the company has been performing on several fronts.
Financial statements are accurate sources of information for shareholders. They can make various corporate decisions based on these papers. Therefore, they must be accurate, so hire chartered accountant firms in Dubai who can help you make accurate statements?
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3. Creditors and lending institutes:
Financial statements should be your equipment when seeking loans/funds from creditors and lending bodies. Since these statements can reflect your liquidity, profitability, and debt ratios, lenders will assess the information before trusting you with their funds. These parties are most concerned about your debt position and past debt performance; financial papers will help them greatly.
Financial statements will reflect whether your company is over-leveraged or under-leveraged. Analyzing these statements will help them decide whether to grant funds or not. The more accurate the financial statements, the better! Once they trust your company, they will continue the deal with your company for a longer period.
Your employees will also ask for financial statements, which sounds strange, right? But it happens in various companies! Employees will ask for financial statements to see how the company is doing and the return rates. There are mainly two reasons why an employee might be interested in the financial statements of a company:
- To see their current wage
- Future salary appraisals
Employees will assess the current and future earning position of the company. If they receive enough earnings, they will decide to stay. Otherwise, they would consider switching their job, which could be a major decision in their career. Therefore, being a company owner, you must provide your employees with accurate financial information to help them decide on their careers.
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5. New investors:
Suppose you have a new investor (shareholder) on the table, and he is ready to invest funds in your company. What solid proof can you give him to convince him of better performance? Nothing will help you more than up-to-date financial statements. If your company is doing well regarding earnings and debt management, the investor will say yes to your offer!
Preparing accurate financial statements is the key, as investors will hardly trust your words. They prefer numbers over your sweet words, and you should hire the best-chartered accountants in Dubai to prepare financial statements. Moreover, you should allow these experts to interpret the financial data for the investor as they understand these numbers better than you do!
Reflect on your business operations in your financial statements!
Financial statements can define your business’s health and success. Preparing these papers with utmost attention is critical as various parties would be interested in these statements. It would be best to hire the best CA firms in your town and let these professionals deal with the numbers. Having them on your side is a better idea!