What Is a Management Financial Report?

There are three main statements in financial statement management: balance sheet, cash flow statement, and profit and loss statement.

Financial Statement Management

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There are three main statements in financial statement management:

The balance sheet (old system: Balance Sheet; IFRS system: Statement of Financial Position) is one of the financial statements in accounting, business accounting, or bookkeeping practice. It is tied with the purchase and sales profit and loss account, cash flow statement, and statement of changes in shareholder equity Common financial statements. The balance sheet uses the principle of accounting balance to divide accounting, asset, liability, and shareholder equity transactions into two major blocks: "assets" and "liabilities and shareholder equity." After entry, transfer, ledger, and trial calculation, , Adjustments, and other accounting procedures, based on the static business situation on a specific date, condensed into a report. In addition to its internal error correction, business direction, and prevention of malpractices, its report function also allows all readers to understand the business status of the enterprise in the shortest time.

The international balance sheet has been changed to Statement Of Financial Position (SOFP) in 2008.

In modern times, accounting principles around the world have become more consistent through communiqués and various communication settings. Because of this, accounting has become a common language for companies in various countries around the world. Similarly, except for the inconsistencies in the text used in the statements, the templates and basic principles are almost identical.

The balance sheet is a very important financial statement in accounting. The most important function is to represent the operating status of an enterprise. In terms of procedures, the balance sheet is the end of the bookkeeping process, which is a collection of the final results and statements after registration entries, postings, and trial adjustments. By nature, the balance sheet represents the comparative relationship between the assets or liabilities of the company or the company and the shareholders' equity, which accurately reflects the company's operating conditions.

As far as the basic composition of the statement is concerned, the balance sheet mainly includes the asset part of the formula on the left side of the statement and the liability and shareholder equity of the formula on the right side. However, if the front end of the operation is recorded in full accordance with accounting principles, and after the correct entry or transfer trial calculation process, the total amount on the left and right side of the balance sheet must be the same. In the end, this formula is the total amount of assets = total amount of liabilities + total amount of shareholders' equity

Cash flow statement (English: Old system: CashFlow Statement; IFRS system: Statement of Cash Flows) is one of the three basic reports of financial statements, which expresses a fixed period (usually monthly or quarterly), a family Changes in the organization's cash (including bank deposits). The appearance of the cash flow statement is mainly to reflect the impact of each item in the balance sheet on cash flow, and is divided into three categories of operation, investment and financing according to its purpose. The cash flow statement can be used to analyze whether an organization has enough cash to meet expenses in the short term. IFRS 7 regulates the preparation of the cash flow statement.

The cash flow statement is a financial report showing cash inflows and outflows for a specified period of time (usually one month, one quarter. Mainly one year's annual report). This report shows how the Balance Sheet and Income Statement and Profit and Loss Account affect cash and cash equivalents, as well as an analysis based on the company's operating, investment and financing perspectives. As an analytical tool, the main role of the cash flow statement is to determine the company's short-term viability, especially its ability to pay bills.

In the past, business operations have emphasized two major balance sheets and profit and loss statements. As business operations expand and complicate, the demand for financial information is increasing day by day, and the disruption of many business operations is caused by the turnover of funds. Gradually, the cash flow statement that reports corporate capital movements has also attracted the attention of many business operators, making it a necessary financial statement.

Profit and loss statement (American English: incomestatement, abbreviation: IS; British English: profit and loss account.), Also known as profit statement, refers to the accounting statement reflecting the company's operating results and distribution in a certain accounting period, is The financial records of the company's operating performance over a period of time reflect the sales revenue, cost of sales, operating expenses, and tax status during this period. The statement results are the company's realized profits or losses.

The income statement (or income statement) is a financial statement used to reflect the company's profit realization (or loss) in a certain period. It is a dynamic report. The income statement can provide readers of the statement with the relevant information needed to make a reasonable economic decision. It can be used to analyze the reasons for changes in profits, the company's operating costs, and make investment value evaluations.

The items of the income statement are divided into two parts according to the composition and distribution of profits. The profit component first lists the sales revenue, and then subtracts the cost of sales to obtain the sales profit; then subtracts various expenses to obtain the operating profit (or loss); and then adds and subtracts non-operating income and expenses, which is the profit ( Loss) Total. The profit distribution part first calculates the after-tax profit by subtracting the income tax payable from the total profit; the following are the reserve fund and profit payable according to the distribution plan; if there is a balance, it is undistributed profit. If the profit distribution part of the income statement is separately listed, it will be the "profit distribution statement".