Main finanical statments Essay Example | Topics and Well Written Essays - 1000 words

Main finanical statments - Essay Example capital inflows all over a certain time duration is the main purpose of the cash flow forecast. The cash includes deposits repayable on demand as well the cash in hand. For our purposes, the overdraft and the drafts lead be balanced at with the banks. A cash flow refers to not only an increase but also a simplification in a business.Profit and Loss account statement The major purpose of the profit and injury account statement is to bring into light whether the business has made profit or loss in their dealings. The statement reflects the net profit after tax by minimizing the business expenses as well as taxation from the overall operating profit. The profit and loss account statement proves vital for the business because it provides happen figures with regards to what is impacting the business profit and what benefits the business. The profit and loss account is made by the business every 6 months or 1 year. By considering the sales that the attach to makes it preserve alter their sales by change magnitude them or so that they croup generate constructive profit for the company and cover all their expenses. The headsman advantage that the profit and loss account can bring to the company is that through this account they can improve their business operation. If in the account they observe that the expenses of the company are high and much much than the sales, they can minimize these expenses to bring benefits to the company. Through this, the net profit will increase since the business will not be paying a lot of money.The Cash flow statement gives an idea to the company regarding from where the money is coming and where the money is being utilized. On the statement the receipts are written in the first column while all the cash flows are written down under the receipts. These statements can be made by the companies for 6 months or for 1 year. Following the writing down of the cash receipts, the payments are al so written. So from the receipts, the payments can