Why are financial statements important?
Financial statements report most of the information needed by external users of financial data, such as banks, investors and private lenders. They report (i) the business’s financial position, (ii) the business’s ability to finance projected capital needs, (iii) why the business may be experiencing cash shortages, (iv) the business’s ability to meet its financial obligations, and (v) differences in net income and associated cash receipts and payments.
