Financial Statements Analysis

The main purpose of financial statements is to provide necessary information about the company’s resources and performance. The format of the financial statements should not be complicated so that even a person who does not have knowledge of the principles of accounting can also study the financial statements and draw conclusions therefrom. Thus As far as possible their language should be non-technical and should have low columns. The Best qualities of an ideal financial statement and also the qualitative characteristics of financial statements is therefore understandability. Therefore the information given in financial statements should be clear and understandable.