Financial information is information that produces essential for the management and development of enterprises accounting and therefore is processed and concentrated for use by management and people working in the company.
The need for this information makes the financial statements occur. The financial information has become an integrated set of financial statements and notes to express what the financial condition, results of operations and changes in financial position of a company.
The importance of financial information to be presented to users serves to formulate its conclusions on the financial performance of the entity. Through this and other evidence the general user can evaluate the future of the business and make economic decisions on it.
Objectives of financial information.
The basic financial statements must meet the objective of reporting on the financial position of the company on a certain date and the results of its operations and changes in its financial position for the accounting period ended on a certain date.
The E. F. are a means of communicating the financial situation and so why not try to convince the reader of a certain point of view or position. The ability of E. F. is to transmit information that meets the user, and since they are different users of this information it should serve to:
Make investment decisions and credit, the main stakeholders of this information are those that can provide financing or granting credit, to know how stable and growth of the company and thus know the performance or return on investment.
Appraise the solvency and liquidity of the company as well as its ability to generate resources, here are the different stakeholders creditors or owners to measure the flow of money and performance.
Evaluate the origin and characteristics of the financial resources of the business and its performance, this area is of general interest to know the use of these resources.
Finally make a judgment of how it has handled the business and evaluate the management of the administration, such as profitability, solvency and growth capacity of the company is managed.
When financial information satisfies the general user is a person with some technical knowledge to form an opinion on:
The level of profitability
Financial position, including its solvency and liquidity
The financial capacity for growth