How to make a financial report?

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Within any company, it is extremely necessary that there is accurate and detailed information about what arises within it, to be able to show society, various areas or sectors How are the operations and processes, as well as everything relevant that can be used to make decisions about it, is information that helps internally since based on this, shareholders will have a broad view of their current capital, as well as the performance that is being obtained, and based on this make informed decisions about the future of the company.

A financial report is a compilation of information. in which an analyst, through the use of comments, explanations, suggestions, drawings, graphics, etc., makes available to his clients, the concepts and amounts contained in the financial statements que fueron el objeto de su estudio anterior. El contents de este informe está compuesto por un cuaderno o libreta, que a su vez se compone de dos portadas y una serie indefinida de hojas donde se expone lo anterior estructurado de diferentes formas para enseñar información específica y necesaria.

Companies cannot proclaim themselves as independent bodies; Only the Analysis of internal financial data is sufficient to forge appropriate and timely interventions. on the financial situation and profitability of a business, this analysis can be complemented with specific information on the conditions that are maintained within the company, as well as the analysis of the conditions that prevail outside the business, and on which the company does not have jurisdiction.

Preparation of the financial report to the business management

The report from the point of view of the material organization can adopt the following parts

Report cover

The front outer part of the covers is intended for:

• Name of the company
• Denomination, in the case of a work on interpretation of financial statements or the respective topic in it.
• The date or period to which the financial statements correspond.

Background of the report

This part of the report is where analysis and research work is based, and in general it is intended for the following:

• Detalles y scope del trabajo realizado.
• Brief history of the company, from its inception to the present day of the most recent report.
• Brief description of the commercial, financial and legal characteristics of the company.
• Objectives that the elaborated work seeks.
• Signature of those responsible for preparing the report.

financial statements

En este capítulo del informe se presentan todos los estados financieros que tiene la compañía en el período anteriormente establecido, de forma general de forma sintética y comparativa, asegurando que la terminología be totalmente clara, legible y alcanzable a quienes tendrán derecho a la data presentada.

Charts in a financial report

De forma general, los informes financieros suelen contener una serie diversa de gráficos que facilitan todavía más la accessibility de los conceptos y los montos que se muestran en el contenido de los estados financieros, es el analista quien decide el número necesario de gráficos y la forma de son.

Comments, suggestions and conclusions

This is where the report ends and where the various comments that have been reached are grouped in an orderly, concise and achievable way. Formulate the analyst responsible for the report.; Likewise, the suggestions and conclusions are self-aware and with knowledge of the facts, this is where any problem or detail presented during the preparation of the report is specified, as well as the final result of this in comparison with previous reports.

Types of financial reports

Internal report

The Public Limited Companies with Variable Capital, under the responsibility of those who manage it, they must present to the annual, quarterly or monthly shareholders' meeting, a financial report that includes at least in the:

• A report from the administrators on the progress of the company in the year, as well as the policies followed by the administrators and, failing that, on the main existing projects. Report that details and explains the main accounting policies and criteria taken into account, complementing the financial information.
• An income statement that shows, with its proper classification and expression, the results of the company.

The internal report It is carried out for administrative purposes and the administrator of the company clearly has direct contact with important files, has access to accounting books and in general all sources of financial information that the company has, are at their free disposal. .

The results of your work are more complete because the internal analyst is well informed of movements and peculiarities that the company may present.

External report

The external analysis, on the other hand, it differs because it is carried out outside the company, either by an investment advisor, a credit analyst, or anyone who is interested in knowing more about the profitability of a company. For external purposes and for the public to have knowledge of the truthful information within the fifteen days following the approval of the information by the owners of the company.

In the external report, the analyzer usually does not have contact with the company and the only solid information he has is that which said company considers relevant to provide to the auditor. For proper analysis of financial statements considerable time is required, as well as money and effort.

To perform a The Right Report Must Make a Proper Presentation, in such a way that it captures the reader's attention, therefore, the report must have the following characteristics:

Full report

Presentation of both favorable and unfavorable information.

Logically developed report

The analysis should be divided into stages, marked in an index at the beginning of the document, each one reflecting the development of the following topics in a logical and natural way, the problem and the basis of the answer come first, clearly the conclusions at the end. finish.

The report must be clear and priced

The facts must be established very clearly, with their pertinent conclusions and timely and fair recommendations, the solutions must be varied according to the problem.

The report must be concrete

It refers to the fact that it must not contain material foreign to the problem, and that it must refer to specific cases of the company. Care must be taken to avoid abstractions and generalizations.

The report must be timely

The essential usefulness of a report depends to a great extent on the actuality of the data obtained, the information must always be timely, since an inopportune report causes a false situation and great problems within the company due to deception and alterations.

It depends on the purpose of the report, the characteristics of this may vary, later some of the most popular.

Extracts for executive purposes

Este tipo de informe se realiza con la finalidad de dar respuesta a las principales preguntas de cualquier ejecutivo interesado en la compañía, entre las persons que pueden estar interesadas se encuentran:

• Shareholders have a very particular interest in constantly reviewing the performance of management. In turn, they are interested in knowing the results during their administration, paying special attention to accounting data. Shareholders will have to choose whether to market their shares or buy more.
• The Investor advisers will analyze financial information obtained to provide a better service to its customers.
• Credit analysts will study the applicants' accounting information on the report to choose who will receive credit.
• The The Secretary of the Treasury will constantly compare the benefits obtained, as detailed in the financial statement, with the global income that is presented in the tax return.
• Unions will review accounting information, emphasizing that the distribution of profits to employees is based on the overall income from the tax return.
• The The Stock Exchange constantly needs all corporations whose shares are listed on the Stock Exchange to present accurate information. periodically.

Detailed report for specific purposes

East type of reports that are prepared for a specific project or purpose, such as a project for the acquisition of machinery, capital investment, issuance of shares, capital increases, obtaining financing, among others. For this reason this report must contain:

• A clear vision of the benefits to the established period.
• A suggested plan for maintaining a balance between profit factors, in other words, sales volume, gross margin, and operating expenses.
• Achieve a higher profitability than the one the company has today, through its Workers, Inventories, Clients and Loan Capital and other sources.
• Profit optimization.

Parameter-based financial statements

Are those income statements in which specific parameters are taken into account, The most widely used analysis methods are the following:

• Standard reasons
• Comparative states
• Simple reasons
• Percentages
• Funds and cash flows
• Trend

conclusion

Financial reports are made according to the people who will use it.These can be internal or external. The intern will be for the owners and members of the company from the highest to the lowest level where they can use it for the better and increase profits and production.

Posteriormente será el dirigido a la gestión de la compañía, siendo su principal target examinar las operaciones de la compañía, detectando sus puntos débiles y fuertes, así como, en base a esto, determinar medidas correctivas a aquellos puntos que afecten las operaciones .
The external character will be the one required third-party companies such as the Government, potential investors, credit analysts and ultimately for the general public, that you can use it for multiple purposes to better understand the benefits of a company.