Corporate financials include cash flow statements, income statements, and balance sheets, which provide information on a company’s financial status. These statements are needed for business planning and obtaining loans. Cash flow statements estimate income and expenses, income statements project profits and losses, and balance sheets show assets, liabilities, and shares. Lenders want sound financials, and accurate data should be used when applying for loans.
Corporate financials are the cash flow statement, income statement, and balance sheet of a company. These reports allow the business owner to know the financial status of the business at any time. Business financial records are also needed to put together a business plan or to apply for a business loan with a bank or lender.
During the planning stage of a business, the cash flow statement that constitutes the business financials contains the estimate of how much money the business expects to bring into the business and how much the business expects to pay in expenses. As the business begins operating, cash flow statements detail the amount of cash the company is bringing to the door from sales and the amount the company is paying in expenses.
One of the statements that make up a company’s financial data is the income statement. The income statement when the business is putting together a business plan is a projection of the profit or loss the business owner expects over certain periods of time. Since the income statement is a projection, it should include both short- and long-term projections. When the company begins operations, the income statement includes the actual numbers, which include revenue, expenses, cost of goods or services sold, gross profit, operating profit, and the business’s net income before and after taxes.
The balance sheet is a unique aspect of corporate financials. It is a snapshot of the business situation for a very specific moment. Specifically, the balance sheet discloses the exact assets, liabilities and shares of the company as it exists on the day a person reviews the balance sheet. In general, the financial statements are reviewed as part of the company’s financial data on the last day of the fiscal or calendar year, depending on the company’s accounting system.
If a business is pooling its business financials to get a loan, the lender wants all of these statements to appear sound. Healthy financials show the company will have the potential to repay the loan. Since the numbers are projections, the figures aren’t exact, but should be more on the conservative side. These figures should be conservative so that if the actual figures are much lower, it doesn’t pose a problem with the lender once the loan is repaid. If you are providing true figures, never embellish or lie. Always use the correct data when using company financial data to obtain a loan.
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