Financial Statements

Financial statements are the statements prepared at the end of year, month etc. Financial statements are prepared according to the nature of business. Financial statements themselves are subject to several limitations. Thus ratios derived, there from, are also subject to those limitations. For example, non-financial changes though important for the business are not relevant by the financial statements. Financial statements are affected to a very great extent by accounting conventions and concepts. Personal judgement plays a great part in determining the figures for financial statements.