Financial information is information produced by the accounting essential for management and business development and therefore is processed and concentrated for use by management and those working in the company.
The need for this information makes the occurrence of financial statements. 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 used to formulate their conclusions on the financial performance of the entity. Through this information and other evidence the general user can evaluate the future of the business and make economic decisions on it.
Financial reporting objectives
The basic financial statements must meet the objective of reporting on the financial situation of the company on a certain date and results of operations and changes in financial position for the accounting period ended on a certain date.
The E. F. is a means of communicating the financial position and an end why not try to convince the reader of a certain viewpoint or position. The ability of E. F. is to transmit information that meets the user, and since there are different users of this information it should serve to:
*Investment decisions and credit, the main stakeholders of this information are those that can provide funding or granting credit to see how stable and growth of the company and thus know the yield or return on investment.
*Appraise the solvency and liquidity of the company and its ability to generate resources, here are the different stakeholder’s creditors or owners to measure the flow of money and performance.
*Evaluate the origin and characteristics of financial business and its performance, this area is of interest to know the use of these resources.
* Finally form an opinion of how it has handled the business and evaluate the management of the administration, how to manage profitability, solvency and growth of the company.