Financial statements: what are their types and importance

Financial statements play a vital role in the accounting process, reflecting the financial position and economic performance of any organization.

In an era of increasing financial and regulatory complexity, the role of the elite team of accountants stands out as a reliable source of knowledge and experience in analyzing and understanding these statements.

Whether you are a long-time financial professional, a business owner, or even just interested in expanding your financial knowledge, this article will be useful to you.

? What are financial statements

Financial statements are considered the backbone of any institution or company and occupy an important place in the world of accounting and financial analysis.

It consists of a set of reports that provide detailed financial information that is useful in evaluating the company’s financial performance and helps in making strategic decisions.

The most prominent of these lists that are essential for any business activity are:

Income statement, which shows profits and losses during a specific period.

The statement of financial position or balance sheet, which shows assets, liabilities and equity at a particular date.

A statement of cash flows, which shows how cash flows into and outside the company.

A list of changes in equity, which shows the changes that occurred in equity during the period.

Types of financial statements and their importance in financial reports

First: The statement of financial position, also known as the balance sheet, which displays assets, liabilities, and ownership rights at a specific date, providing a comprehensive overview of the company’s financial position.

Second, the income statement that shows revenues, costs, and profits during a specific accounting period. This list is important for analyzing the company’s operational performance.

Third, the statement of cash flows, which provides details about how the company generates cash and uses it in operating, investing, and financing activities.

Finally, the list of changes in equity, which shows the changes that occurred in equity during the financial period.

By providing specialized insights into each listing, we help companies enhance the transparency and reliability of their financial statements.

A good knowledge of these lists can contribute to improving strategic decision-making processes and enhancing trust between the company and its various stakeholders.

How to prepare financial statements

Preparing financial statements requires specialized skill and experience to ensure accuracy and transparency, and here comes the role of elite accountants who provide close supervision and deep knowledge of how to prepare these vital documents.

: To prepare the lists, a set of methodological steps and internationally accepted accounting standards must be followed

  • Collecting financial data: It begins with collecting all the necessary financial information, such as records of sales, expenses, collections and payments.
  • Data classification: Data is classified according to its nature and purpose, such as classification of assets, liabilities, and property rights.
  • Recording accounting entries: Accountants record accounting entries in accordance with the followed accounting principles.
  • Preparing the balance sheet: The balance sheet shows the financial position of the facility on a specific date, and includes assets, liabilities, and property rights.
  • Preparing the income statement: The income statement shows profits or losses during a specific period by displaying revenues, costs, and expenses.
  • Preparing a cash flow statement: It gives an overview of the cash inflows and outflows from operating, investing and financing activities.
  • Review and analysis: Accountants review and analyze the lists to ensure their accuracy and compliance with standards.

Financial statements of Saudi companies

It serves as a mirror that reflects the true picture of the financial situation and economic performance of these companies.

It consists of a set of basic financial reports that include the balance sheet, income statement, cash flow statement, and statement of changes in equity. These statements provide a comprehensive picture of the financial position, results of operations, and changes in the financial position of the company.

These lists can play a vital role in strategic decision-making by investors, managers and creditors, as well as in determining the value of the company in the market.

Statement analysis provides deep insight into financial performance and helps evaluate operational efficiency, solvency, liquidity and profitability.

Therefore, Elite Accountants’ experts take a scientific and practical approach in analyzing these lists to provide clients with the information necessary to understand the precise financial aspects and provide constructive recommendations that contribute to the growth and prosperity of companies in the Saudi market.

How to inquire about filing financial statements

Companies must submit these lists to the competent authorities in accordance with applicable laws.

 ? But how is it done

  1. Visit the website of the financial authority or regulatory body that requires the filing of lists.
  2. Search for the option to inquire about lists, which is usually available within electronic services.
  3. Enter the data required to verify the deposit, such as the company’s commercial registration number, or its code.
  4. After entering the data, the status of the deposit will be displayed and whether the list has been submitted and accepted or not.

In conclusion, we stress the importance of understanding the different types of financial statements and how to prepare them accurately, especially for companies that seek to provide a clear picture of their financial position.

At Elite Accountants, we understand the challenges that companies face in preparing and submitting these vital documents, and we strive to provide financial solutions tailored to meet your needs.

Let us be your partners in success! Contact us now for an immediate consultation.


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