InterviewSolution
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Why are invester and potential invester interested in financial statements of a company |
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Answer» Financial Statements show the following:1. How much the company is selling.2. How much profit (or loss) the company is maikng.3. How much money it has in the bank.Any investor who parks their money in a business wants only one thing: returns. They need to be sure that your business will generate enough revenue and profits.Explanation:Financial Statements usually INCLUDE a P & L (Profit and Loss Statement) and Balance Sheet (Assets, Liabilities and NET Worth). While those items are important, a "recast" or "proforma" financial statement could ALSO be important - it shows what might have been if different items were "booked" ddifferently. For example, a small business may take certain "charges" on their books to reduce taxes and end up showing a "net loss" for tax puposes while actually having a "POSITIVE cash flow". |
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