What are Financial Statements?
Financial Statements, in the context of the construction industry, are formal records that portray the financial activities and conditions of a construction company. They're crucial for presenting a company's financial health to stakeholders and assisting in making strategic decisions. The primary types include balance sheets, income statements, cash flow statements, and equity statements. The balance sheet gives an overview of the company's assets, liabilities, and shareholders' equity. The income statement shows revenue and expenses, revealing the profit or loss over a period. Cash flow statements illustrate how changes in balance sheet and income statement items affect cash and cash equivalents. Equity statement depicts changes in the owner's interest in company during the accounting period. Without these statements, it would be challenging to understand a construction firm's economic status and make informed future financial decisions.