3.6.4 - Analysing the financial performance of a business GapFill

Financial statements are important for making business decisions as well as providing information about the financial situation of a business. Information will be provided on assets which the business  changesdevelopsownsowes and  stockemployeesliabilitieslegal that the business has to pay. 

Detailed information is provided on the income statement which will include gross profit, net profit and  staff numbersassetsexaminationexpenses, along with the revenue for the  dayyearweekmonth. This data allows a range of calculations to be carried out which will be of interest to  advertisersmanagersstakeholderssuppliers, and can measure current performance against past performance. 

Businesses need to monitor their finances throughout the year because the financial statements are just a  seriessnapshotpicturerecord of their situation on a particular date, known as the end of the financial year. Consequently, they are  out of date honest unobtainable detailed and information must be updated before decisions are made. This may come from the  cash flow recordsmanaging directorbankshare dividends.