Financial Statements- Is a record of a Business’s Financial Figures that contains the data of how their business is running and their cash flows. They should be clearly structured so that the professionals understand them. Financial Statements are used to show how a company’s money is created and how able they are to make their own money, it is also used to show what sources they use for their money. They also show us if the business is able to pay back the money and have the ability to pay back their debts. The statement also shows financial ratios that can specify the form of a particular business and also shows if any profit is at loss. Financial Statements contain a Balance sheet, Statement of Income and cash flow Statement. (Tutor notes, Accessed on 29/10/2015). Budgets- A budget contains planned sales, Resource Quantities, Cash flows, Costs and expenses, liabilities and assets. Budgets help you spend the right amount of money so you don’t go over the amount and therefore leads to debt. This helps the Business to be on track of resources, revenues and costs. Preparing a budget helps the business to organise their finances and prepare for any type of emergencies that they might suffer from in the future. The business should find the Net Income, Revenues and Expenses so that they …show more content…
They are used to identify their financial figures of how large or little they are and find out the cause of these figures. A flexible budget is a budget that changes in the volume of how an activity is doing. The flexible budget is more beneficial than a static budget and then this type of analysis is used within the figures of an organisation, create targets for their employees and allows management to change the effect of their standard if they are seen as a financial risk that will put the company down. (Tutor notes, Accessed on