Every company is required to have financial statements necessarily. These statements provides a glance at the performance of the company, as well as, information related to assets, liabilities income and cash flow. To be more transparent with the finances of the company , results in the betterment of the company in the long run. Financial statements assists in funding and extracting loans and thus it prepares for future. At first, a balance sheet should be created. A balance sheet reveals that where the company stands financially, and the various kinds of assets and liabilities that the business possesses. After this the process of cash flow should be handled. Here, the cash flow is broken down into operations, investments and financial activities to see that from where the income is coming from.
Source: THE BUSINESS BACKER