The Development of the Company

The Development of the Company

The development of the company can be seen by reading the financial statements of a company, which is a record of the growth of a company.

In addition to marking the company’s growth, financial statements also serve as a form of corporate accountability to investors who have joined.

Friend, to understand more fully about financial statements, please refer to the following article on financial statements.

The Development of the Company

Financial Report Function

As edu mentioned in the previous paragraph, financial statements function as follows:

For External Parties

To present company data to potential investors who need it. Mark or record company growth. In addition, it is also a form of responsibility to investors who have invested

Then financial data as well as internal parties (the company) are needed in making decisions for the future.


For External Parties

The function of financial statements for external parties is as a reference for creditors to assess the company’s ability to pay its debt obligations before deciding to provide loans. In addition, the function of financial reports for other external parties is as a benchmark for government agencies to calculate tax levies that must be paid by companies.


Functions of Public Sector Financial Reports

The function of public sector financial reports or more commonly known as the public at large is so that the financial statements of a company can be used as material for analysis or academic research.


Financial Report Functions for Investors


The function of financial statements for investors is as a benchmark for decision making whether a company is eligible to receive investment and how capable a company is in managing the investment funds provided in order to generate profits for potential investors.

In addition to the above functions, there is also a financial statement function for company owners, namely to find out whether the company has operated as previously planned or not.

The function of financial statements for the company’s internal parties is to evaluate what steps or policies must be taken to maintain or maximize the company’s performance in terms of financial gain.


Financial Reports For Investors

Profit and loss

Profit and loss is a report in the form of a summary of the company’s activities over a certain period of time.

The income statement is a description of the profits and losses of all business activities that the company does.


Equity can be interpreted as how much rights the company has from the total assets in the company.

The origin of the word equity is ‘equity’ which means net worth. In the statement of changes in quantity, there are a number of numbers that indicate a change in ownership.

It could be in the form of an increase or it could be a decrease in assets. Then include wealth at a certain time that requires reporting. From here the value of investment in a company can be determined.

Cash flow

The cash flow statement is one of the forms of financial statements that exist in the company. A cash flow statement describes the inflow and outflow of a company’s assets or finances. So that it displays the source of entry and the reason for the exit of funds from a company.

Through cash flow reports, the company’s internal parties can make decisions about the company’s next movement.

Meanwhile, from the perspective of external parties (such as investors, creditors, and other parties), the information they obtain from cash flow statement data will help assess and predict the company’s financial position.


The balance sheet is a reflection of the financial position of a company in the form of financial statements. Which consists of several components, namely assets (assets), debt (liabilities) and also capital (equity).

Assets or assets are everything that is in the ownership of the company. A liability or liability is an attempt by the company to acquire or pay for the asset.

Thus the development of the company can be seen by checking the financial statements of a company. A good company will have good financial reports as well. Thank you so much and see you later.

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