State the importance of financial statement

Financial statements are very much important to the various parties interested in financial

Statement analysis. The parties like shareholders, management, creditors, employees and

Government etc get the information required for them on the basis of those statements. In all,

The importance of financial statement can be stated as follows:

  1. It helps to perform comparative study by giving information of incomes and expenditures

In different heads.

2. It provides information about sources and application of funds that helps to evaluate the

Financial condition of business firm.

3. It helps to measure the managerial efficiency of the firm.

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