How To Write A Financial Report?

Whenever a student is given a Financial Report to write for their College/University assignment, it builds up an environment of fear and anxiety among them.

Are you looking for tips to write a financial report for your College/University assignment but facing problems with where to start and what to include? Well, here is what the Expert Melina Saunders believes should be inculcated in a Financial Report.

1. Letter to Shareholders

This letter would be written by the Chairman, CEO or Managing Director and is like the main person behind the entire company talking directly to its shareholders. This letter sets the tone for the whole report and talks about the company's approach in the coming period. Thus, if you are invested in a company, you should read this every year.

2. Financial Highlights

This section contains the financial results of the year just gone by. Check for growth in revenue, profit after tax and other significant numbers. In this section, you can also see the picture of the industry as a whole. It includes data about market share, predictions indicating trends in the business, reviews and networks among key players in the industry.

3. Audited Financial Statements

The Income and Expenditure reports for the year should be audited before presenting to all the stakeholders. It instils reliability and confidence in the minds of the readers. Financial statements include balance sheets, income or profit and loss statements and a cash flow statement - they sum up the business's financial position.

4. Present the Financial Position

Colourful charts and graphs are used to indicate the proper financial position of the business. Stakeholders want to see that the business is generating income, minimizing expenses, turning a profit and planning the next financial year according to accurate financial information.

5. Cash Flow Details

Inflow and outflow of cash in the business are important to those reading your report. While the business may be rich in assets or potential profits, the cash flow is the total of finances being transferred in and out of a company's bank account during the financial year. It reflects the business's liquidity and is a true reflection of business stability.

6. Notes to the Statements

Financial statements may not be easy for individuals who are not directly involved in the business to understand. Thus, they are accompanied by additional notes to clarify each or several facts and figures in the statements.

A comprehensive report gives stakeholders, potential donors, and other interested parties information about the business, its profits and other growth prospects used to make decisions. The information in these reports should be as accurate as possible and error-free.

Conclusion

Inclusion of all the above items is recommended as it makes the report easier, less time-consuming to read, and easier to understand. The involvement of the planning committee to determine the data you need, collating and compiling reports is vital to make the report relevant without making it too long or tedious to read. Remember: Shareholders and stakeholders are interested in finding out the results of your yearly operations. The tone of the report The report should inspire confidence in the company. Use facts and figures in the reports to tell a story that induces people to connect with the company. Avoid making the report too long, confusing or tedious to read.

Make sure to answer the following questions:

• Why does the company exist?
• What is the vision or objective of the business?
• What is the strategy to reach this goal?
• How does the company make money?

Financial Reports should also include a component of the "Management Discussion and Analysis" section of the Annual reports, Corporate Information, Report on Corporate Governance and detailed financial results for the last 10 years to make a point of view clear to the stakeholders.

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