Why do firms prepare finacial statements at the end of the accounting period?

Question

Why do firms prepare finacial statements at the end of the accounting period? How useful are the year-end reprots to the financial managers?

Answer 1

Firms need to know what they earned in the accounting period. This will define what they owe to the govenment or others and what others owe them. And hence financial statments.

The year end reports are equally important.This generates the confidence to make the decisions of continuing in the business, expand or shrink for sustainance. This tells whether the objective of the business was met or not.

Answer 2

If they are a public company, they are required to by the SEC. The public wants to know what is happening with the company, so that they can decide basically whether they want to buy shares in the company, sell shares in the company, hold what they have, etc. If it's a private company then the lenders a lot of times want the financial statements to see that the company is still doing well. I used to work for a publicly traded company that has since gone private, but I would produce monthly financials for the division that I was Controller of, so that corporate could see how the divisions were doing, and also the divisions themselves could see how they were doing. They wanted the financials on a monthly basis.

Answer 3

Firms prepare these reports to show the public how their finances are. Whether it be the shareholders who want to make sure their money is being used wisely, or the banks who might be asked to loan money to the company.

The reports are very useful to financial managers, and portfolio managers in particular. Where the general public could look at these documents and not be able to make sense of them, the portfolio managers and analysts can disect the different reports to figure out whether or not they are good companies to invest in.

With the big Enron problem, the reports have become even more important in that they need to be more complete and accurate.

I hope this helps.

Answer 4

because it is imposible to write them at the begining since Miss Cleo went out of business.

The reports tell them how the company did during that period & allows them a chance to make any adjustments that may be needed for the next term. They are absolutely essential for a company. Maybe not for the secretary, payroll dpt., or any other dpt. that may not need that info. Even though they get the wave of change from them b/c they must make adjustments to what they need to do.

Answer 5

The year-end reports are for public consumption (for investors) and to satisfy regulatory and statutory requirements. Internally, they prepare monthly reports for the directors and managers for decision making. You are right in that financial managers need more current reports, and they get them at least monthly, if not weekly, but probably in a less structured form.

Answer 6

you're complicated me. You provide us the figures for 2009 and 2010, then you extremely let us know that the money at monetary employer in 2011 is monetary employer overdraft, then you extremely ask us to coach a money bypass assertion for 2011. Huh? How can we do this, given in straightforward terms 2009 and 2010?

Answer 7

They are required to by SEC.