A financial report is a document that summarizes a company’s financial status. It includes key metrics like revenue, expenses and cash flow to offer a 360-degree view of your business’s financial health. It also reveals trends, potential risks and opportunities for growth. Ultimately, proper financial reporting enables clear and accurate communication with all stakeholders, from investors to internal departments.
There are several types of financial reports, depending on what you need and when. For example, a profit and loss statement calculates revenues and operating costs over the period to reveal your company’s profitability. The balance sheet, on the other hand, shows a snapshot of your company’s assets, liabilities and shareholders’ equity. It is often scrutinized by investors to assess a company’s liquidity and capital resources, as well as by lenders to ensure creditworthiness.
The statement of change in equity tracks shifts in shareholder’s equity over the period. It includes details like retained earnings, stock issuance and dividend payments to provide insight into financial decisions that affect share value.
For quarterly reports, a public company must file a Form 10-Q with the SEC. This contains unaudited financial statements and summary commentary from management to give investors a glimpse into the company’s performance. Other than that, many companies produce regular reports to track their performance and improve efficiencies across departments. This is especially true for FMCG companies, which often create standardized KPIs to ensure consistency and transparency across the organization. This enables them to quickly spot unforeseen trends, mitigate potential risks and take quick action to drive success.
