Purpose of Financial Statements
                     
Purpose of Financial Statements
Monitor the progress of the business
• The business needs to maintain good records to monitor the progress of the business. Records can show 
whether your business is improving which items are selling or what changes are needed to be made.
Identify the sources of income
Them money or property can be received from different sources. The financial statements can identify the 
sources of income. The information helps to separate business from non-business receipts and taxable and 
nontaxable income.
Purpose of Financial Statements
Financial performance of the entities has been provided
The main purpose of financial reporting is to provide the entities financial information. This serves as a 
conceptual framework for all the entities who provide the financial performance of the company.
Provide assistance to existing entities 
Assistance to entities has to be provided anal explain that whether they should invest in the existing 
investments or which investments can be harmful to the company
Purpose of Financial Statements
To have an overview of the Prospective future Cashflows
• This provides an overview of the future economic performance of the company. They also give a future 
prediction to the investors of the company and also help them to know about any future risks of the 
company.
Thank You
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