How to Write a Great Financial Report? Tips and Best Practices

how to write a financial report pdf

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To make informed financial decisions in your company, you first have to be, well, informed.

Understanding the financial activity of your company sets the foundation for identifying good business opportunities and making the right decisions to ensure future growth.

By tracking, organizing, and analyzing financial performances, you will have a clearer picture of where the money is going and where it’s coming from. No wonder finance is one of the most monitored and reported operations, according to Databox’s State of Business Reporting .

To stay on top of numbers, companies use financial reports.

Financial reports are formal documents that capture all the significant financial activities within a business in a specific period.

While these reports are extremely useful for you and your key stakeholders, you won’t be the only one reaping the fruits. Financial statements are also examined by potential investors and banks since they provide them with enough insight to determine whether they want to invest in your business.

In this article, we are going to walk you through what financial reports are, why they are significant and show you a step-by-step guide that will take your financial reports and business reporting as a whole, to the next level.

What Is a Financial Report?

What is the purpose of financial reporting, what are the types of financial reporting, how to write a financial report, finance report examples.

  • Improve Financial Reporting with Databox


Financial reports are official company documents that showcase all the financial activities and performances of your business over a specific period. Usually, they are created on a quarterly or yearly basis.

Every business is legally obliged to use financial reporting to display its current financial status and organize financial data.

The documents are available for public view which means that potential banks and investors will most likely analyze them before they decide to work with you and invest in your business.

They are also important for tracking future profitability estimates, business growth, and overall financial health.

At bottom, financial reports provide you with insight into how much money you have, how much did you spend, and where it is coming from. Based on the data within the report, you can make informed business decisions and create plans for future spending.

The key things a financial report should include are:

  • Cash flow data
  • Asset and liability evaluation
  • Shareholder equity analysis
  • Profitability measurements

Related : Quarterly Business Review: How to Write One and How to Present It Successfully

Financial reports are used to track, analyze, and display your company’s cash flow .

Understanding how your business is performing from a financial standpoint can seem like an impossible task without these reports.

However, financial reports aren’t used only because they are practical; you are legally required to include them.

Here are some of the main ways in which financial reports can help your business:

Communicate essential data

Monitors income and expenses, supports financial analysis and decision-making.

  • Simplify your taxes

Having an insight into the current financial situation of your business is important to each high-ranking member of the company (stakeholders, executives, investors, and partners).

You will use this financial data to create budget plans and monitor the company’s overall performance. When you establish an open communication and transparency policy within your business, you are more likely to attract new investors and enhance funding.

The information communicated in financial statements is what investors rely on when they are assessing risks, profitability, and future returns.

One way to gain the trust of investors is to showcase how your financial performance stacks up against your peers. For example, by joining this benchmark group , you can better understand your gross profit margin performance and see how metrics like income, gross profit, net income, net operating increase, etc compare against businesses like yours.

For example, you can discover that the median gross profit a month for B2B, B2C, SaaS and eCommerce is 73.79K . If you perform better than the median, this might be a good incentive for your investors to increase your funding.

average gross profit for B2B, B2C, SaaS and eCommerce

*Important note: Databox Benchmark Groups show median values. The median is calculated by taking the “middle” value, the value for which half of the observations are larger and half are smaller. The average is calculated by adding up all of the individual values and dividing this total by the number of observations. While both are measures of central tendency, when there is a possibility of extreme values, the median is generally the better measure to use.

Benchmark Your Performance Against Hundreds of Companies Just Like Yours

Viewing benchmark data can be enlightening, but seeing where your company’s efforts rank against those benchmarks can be game-changing. 

Browse Databox’s open Benchmark Groups and join ones relevant to your business to get free and instant performance benchmarks. 

Financial reporting involves tracking incomes and expenses for a specific time period. To establish efficient debt management and budget allocation, you will need an insight into the most important spending areas .

By tracking income and expenses , you will also understand current liabilities and assets. Analyzing financial documentation will provide you with a bigger picture regarding the key metrics such as debt-to-asset ratios that investors use to calculate potential profitability.

All of this is information is crucial for staying ahead of your competitors.

Related : How to Write a Great Business Expense Report: A Step-By-Step Guide with Examples

The performance analysis in financial reports is what you rely on to make better business decisions.

Considering the different data that financial reports include, you can check out real-time information regarding historical performances, key spending areas, and use them to create accurate financial forecasts.

Implementing detailed financial analysis and using developed data models can help any business better evaluate current activities and make future business growth decisions.

You will be able to recognize trends, potential problems, and stay on top of your financial performances in real-time. This sets the foundation for quick and accurate economic decisions.

The main purpose of financial reports is to make sure your business is in compliance with the law and regulations of government agencies.

Regulatory institutions examine every document that evaluates the financial activities of your company. This is why making accurate financial documentation is crucial for the well-being of your business.

Aside from accuracy, you will also have to follow certain deadlines that these institutions set. This sometimes causes pressure in accounting departments to create complex financial reports quickly and accurately, which is why regular bookkeeping is immensely important.

In the US, private and public companies have to be compliant with the GAAP (Generally Accepted Accounting Principles), while international companies mostly report under the IRFS (International Reporting Financial Standards).

Both of these organizations provide some standard guidelines but there are a few differences you will have to pay attention to when creating your financial statements.

Simplify your taxes  

No matter how big or small your business is, doing taxes can be a stressful task.

By creating accurate financial reports, you can make tax calculation a lot easier since you will minimize any chances of error and save time by including all financial data in one document.

Not only that, since financial reports are a legal requirement, the IRS uses them to evaluate the tax income of each individual company. 

Additionally, with the introduction of Making Tax Digital (MTD) in many countries, including the UK, it is now mandatory for businesses to maintain digital records and submit tax returns digitally. This means that accurate financial reports are more important than ever, as they will be used to populate the required digital tax submissions.

While financial reports all have the same goal, there are a few different types that you should know about.

This isn’t only a matter of compliance or best practice, these reports are key for understanding the different segments of cash flow.

Here are the main types of financial reporting:

Balance Sheet

Cash flow statement, income statement, shareholder equity statement.

A balance sheet is a financial statement that tracks the total amount of assets, liabilities, and shareholder equities within your company. They also provide you with a real-time evaluation of asset liquidity and debt coverage.

Most companies create balance sheets on a quarterly basis and include the data from each quarter in the annual report.

When creating a balance sheet, there is an asset page (includes available cash, equipment value, inventory value, etc.) and a liability page (includes accounts payable, credit card balances, bank loans, etc.) that you need to fulfill.

Once you total these assets and liabilities, you will subtract liabilities from the assets. The amount you get is what is called ‘owner’s equity’.

This is a financial statement that records all the different cash flow activities in the company.

Cash flow statements track cash generated and cash spent amounts in a specific time period. This report is crucial for measuring whether companies generate enough cash to cover their debts. Also, it provides insight into fund operations, investments, and the overall activities that are generating revenue.

This statement is helpful for investors since they can use it to determine whether your business presents a good investment opportunity .

While balance sheets incorporate certain calculations to determine financial values, cash flow statements are consisted of three main elements:

  • Operational activities – inventories, wages, tax income, accounts receivable, accounts payable, and cash receipts
  • Investment activities – investment earnings use, investment earnings generation, asset sales, issued loans, payments from mergers
  • Financing activities – payable dividends, debt payments, debt issuance, cash from investors, and stock repurchases

The income statement records the company’s expenses, revenue, and net loss/income over a specific time period.

Balance sheets focus on the current activities and performances while income sheets track them over a longer period. Businesses tend to track income statements each quarter to gain better insight into the different financial processes that occur.

Income statements include profits and losses , which is why they are also called P&L statements (Profits & Losses).

The main elements included on the income statement are:

  • Operating revenue – financial data regarding sales of products or services
  • Net and gross revenue – includes the total sales revenue and remaining revenue (after the cost subtraction)
  • Primary expenses – these include general costs, administrative costs, depreciation and selling, and COGS (cost of goods sold)
  • Secondary expenses – capital loss, asset loss, debt interest, and loan interest
  • Nonoperating revenue – this is revenue that comes from accrued interest, it includes investment returns, capital gains, and royalty payments

Even though shareholder’s equity is usually included on the balance sheet, larger companies tend to report these activities on a separate statement.

This statement tracks the amount of money key stakeholders invest in the business. The investments most commonly include company stocks and securities. After dividends are released to stockholders, the retained earnings in the company change.

Stakeholder equity statement includes these key components:

  • Retained earnings after dividends and losses have been subtracted
  • Common/preferred stock sales
  • Purchased treasury stock
  • Generated income (including the income that comes from unrealized capital gains)

Pro Tip: How to Stay on Top of the Financial Health of Your Business

Do you own and manage a small business? Then you know how much of a struggle it can be to stay on top of the financial health of your business on a daily basis. Now you can pull data from QuickBooks and HubSpot’s CRM to track your key business metrics in one convenient dashboard, including:

  • Open deals and deal amounts by pipeline stage. Get sales data directly from your HubSpot CRM and track deals, deal amounts, deal stages, and dates from your sales pipeline. 
  • Key financial data. Track gross profit margin, open invoices by amount and by customer, paid invoices, expenses, and income from QuickBooks.

Now you can benefit from the experience of our HubSpot CRM and QuickBooks experts, who have put together a plug-and-play Databox template that helps you monitor and analyze your key financial metrics. It’s simple to implement and start using, and best of all, it’s free!


You can easily set it up in just a few clicks – no coding required.

To set up the dashboard, follow these 3 simple steps:

Step 1: Get the template 

Step 2: Connect your HubSpot and Quickbooks accounts with Databox. 

Step 3: Watch your dashboard populate in seconds.

Financial reports help you understand your company’s financial performance, attract potential investors, and are legally required. This is why you have to make sure that they are as accurate as possible.

You want your financial reports to be comprehensive, understandable, and precise.

Even though creating a good financial report can be very complex, we are going to show you a step-by-step guide that will make the whole process much easier.

Follow these steps to create a great financial report:

Step 1 – Make a Sales Forecast

Step 2 – create a budget for expenses, step 3 – create a cash flow statement, step 4 – estimate net profit, step 5 – manage assets and liabilities, step 6 – find the breakeven point.

When making a sales forecast, the first thing you should do is create a spreadsheet that includes your sales performance from the last three years.

Use a specific section for each line of sales and organize columns for each month of year one. For years two and three, organize columns on a quarterly basis.

Create three different blocks – one for pricing, one for unit sales, and the third one for multiplying units by unit cost (to calculate the cost of sales).

Cost of sales is important because it helps you calculate a precise gross margin.

Once you do the math, you can make an accurate sales forecast that is backed up by historic financial data.

PRO TIP: If you are using HubSpot CRM to visualize your sales data, watch the video below to learn how to set up and track your HubSpot CRM data in order to more accurately forecast your sales this month, quarter, and beyond.

how to write a financial report pdf

Once you have made a sales forecast, you will want to calculate how much it will cost you.

When creating an expense budget, you should include both fixed costs (rent, payroll, etc.) and variable costs (marketing and promotional expenses). Costs such as interest and taxes can’t be completely accurate, so you are going to have to make rough estimates.

For taxes, you can multiply the estimated debt balance by your estimated tax percentage rate.

To estimate interest, multiply your estimated debt balance by an estimated interest rate.

We already mentioned what cash flow statements are and why they are so important for your business. They are typically created based on the sales forecast, balance sheet components, and other estimates.

To make cash flow estimates, companies should use historical financial statements. If your business is relatively new, you should project cash flow statements by breaking them down into 12 months.

Your way of invoicing is also linked to cash flow estimates.

For example, if a customer has the right to pay for your services after 30 days, the cash flow statement will show that you only collected 80% of your invoices within the month (while you need 100% to cover the expenses).

To estimate net profit, you should use the numbers from your sales forecast, expense estimates, and cash flow statement.

You can calculate the net profit by subtracting expenses, interests, and taxes from the gross margin .

This step is extremely important since it serves as a profit and loss statement that helps you create a detailed business forecast for the next three years.

In order to estimate your business’s net worth at the end of a fiscal year, you have to be able to manage assets and liabilities that won’t be shown in the profits and loss statement.

Come up with a rough estimate of how much money you expect to have on hand each month and include accounts receivable, inventory, land, and equipment.

After that, calculate liabilities, debts from outstanding loans, and accounts payable.

You know that you have found a breakeven point if your business expenses are in line with the sales volume.

The three-year income estimation should help you acquire this analysis. In viable businesses, the total revenue should exceed total expenses.

For potential investors, this kind of information is crucial since they want to be reassured that they are investing in a company with steady growth.

Nowadays, most companies use different tools and templates to make their reporting process easier. Using dashboards can help you track the metrics you obtain from the financial management tools that your business integrates.

Databox offers pre-built financial templates that can help you track the most important financial metrics in one place.

With our comprehensive dashboards, you can follow the most significant numbers and later include them in your financial report, making the whole process less time-consuming.

We understand that each business is different, which is why you can also customize the reports in any way you deem fit and at any time.

Here are some of our most popular financial reports that you can try out:

  • Quickbooks Profit and Loss Overview Dashboard

Xero Profitability Overview Dashboard

Stripe (mrr & churn) dashboard, profitwell revenue trends dashboard, paypal (account overview) dashboard, quickbooks profit and loss overview dashboard.

To gain valuable insight into the sales and expenses that incur in your business, you can use the QuickBooks Profit and Loss Overview Dashboard .

Make sure you are staying on top of your numbers by tracking monthly, quarterly, and yearly income. Also, this report will help you figure out how profitable your company is and which areas may need to be fixed.

Some of the key metrics you can follow are net profit, income by month, expenses by month, and profit margin.

QuickBooks Profit and Loss Overview Dashboard

Xero is one of the most popular accounting systems that companies use to manage their financial positions. However, it can sometimes be hard to organize the large amount of data this tool provides.

This is where the Xero Profitability Overview Dashboard can come in handy. This customizable template will provide you with a comprehensive view of the sales and expenses that go into your Xero system.

Once the time comes for creating a financial report, you can simply integrate the data you gathered in this dashboard.

The key metrics it includes are net profit, income by month, expenses by month, profits, losses, gross profit, and other income.

Xero Profitability Overview Dashboard

Use the Stripe Dashboard to monitor your churn rate and track MRR growth in real-time. Also, you can check how many customers your business currently has at any given time.

Once you connect your Stripe account to this template, you will be able to answer these questions:

  • How much money did I make through sales today?
  • How can I track my MRR (Monthly Recurring Revenue)?
  • How many active customers do we have?
  • How much revenue did I lose from churned customers?

Some of the metrics you can visualize are churn rate goal, customer churn rate, gross volume, revenue churn, and customers.

Stripe (MRR & Churn) Dashboard

Profitwell Revenue Trends Dashboard allows you to monitor all the incoming sources of revenue for your SaaS business and keep track of the important churn metrics.

You can use this free template to see how fast your business is growing. The SaaS metrics will all be located in one comprehensive dashboard and you can visualize all the data with only one click.

Also, you can compare revenue from upgrades and downgrades and investigate your churn ratio revenue.

Profitwell Revenue Trends Dashboard

The PayPal Account Overview Dashboard is extremely useful for bigger companies who want to have a clear overview of their payments, refunds, sales, and other key metrics that your business relies on.

Connecting your PayPal account to the template can be done in a matter of minutes and you will get the answers to questions such as:

  • How can I track gross sales?
  • What is the best way to calculate net sales?
  • How much did I spend on PayPal fees in the previous month?
  • How can I check my PayPal account balance?
  • How much money was returned through refunds last month?

PayPal (Account Overview) Dashboard

Streamline Financial Reporting with Databox

Since the financial reports you create will be examined by both government agencies and potential investors, you will want to make sure that they are top-notch.

However, the reporting process can sometimes feel a bit overwhelming and you will face a lot of pressure trying to create the perfect report.

Databox can help relieve this stress and enhance your financial reporting skills.

No matter if you create these financial statements quarterly or annually, you will end up with a handful of data to analyze. With financial reporting software such as Databox, this analysis process will become both simpler and quicker.

With our customizable dashboards, you can visualize all the most important data and gather it in one place. Aside from being visually pleasing, your reports will also be much more engaging and minimize any chances of error since the information will be imported directly from your financial management tools.

To satisfy both your company’s key stakeholders and potential partners, you can sign up here for a free trial and put your financial reporting on autopilot.

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How to Prepare a Financial Report

Last Updated: September 28, 2023 References

This article was co-authored by Alan Mehdiani, CPA and by wikiHow staff writer, Jennifer Mueller, JD . Alan Mehdiani is a certified public accountant and the CEO of Mehdiani Financial Management, based in the Los Angeles, California metro area. With over 15 years of experience in financial and wealth management, Alan has experience in accounting and taxation, business formation, financial planning and investments, and real estate and business sales. Alan holds a BA in Business Economics and Accounting from the University of California, Los Angeles. There are 11 references cited in this article, which can be found at the bottom of the page. This article has been viewed 120,592 times.

Alan Mehdiani, CPA

Completing Your Income Statement

Step 1 List your income for the period covered by your report.

  • If your organization sells both goods and services, you may want to include the income for each separately.
  • Make sure you're listing the gross revenue the organization has earned. You'll deduct expenses to find the organization's net income later on.

Step 2 Determine the cost of goods or services you sold.

  • In the service sector, the costs would include labor and supplies used to provide the service you offer.

Step 3 Compute your gross profit.

  • For example, if you had $20,000 in revenue for the period and $5,000 in costs, your gross profit would be $15,000.
  • In formatting your income statement, you may want to make the gross profit label and amount bold so that it stands out from the other information. If you're creating a full-color document, list the gross profit in green if it is a positive number. Use red for a negative number or loss.
  • Round your numbers to the nearest whole number, rather than using decimals or fractions of a unit.

Step 4 Provide an itemized list of expenses over the course of the same period.

  • Depreciation of fixed assets, such as equipment, is also included in your organization's expenses for the period. Tax departments typically have depreciation tables that will help you figure out the amount of depreciation for the period covered by your income statement. Accounting software also includes tools to help you calculate depreciation.

Step 5 Subtract your expenses from your gross profit.

  • The result of this equation is your net profit for the period covered by the income statement. Label it and make the text bold so that it stands out from the rest. If you're making a full-color income statement, change the color of the amount to green if it is a positive number or red if it is a negative number.

Drafting a Statement of Retained Earnings

Step 1 Determine the current retained earnings balance.

  • To find this amount, look at the organization's previous financial statement. If this is your organization's first financial statement, the amount of retained earnings will likely be 0.
  • If your organization distributes all income to its shareholders or equity partners, the retained earnings balance will be 0. If the organization has a deficit or is "in the red," this balance may be a negative number.

Step 2 List the net income from your income statement.

  • On a full-color Statement of Retained Earnings, you typically would change the font color so that positive amounts are green and negative amounts are red. If you're not drafting a full-color statement, place parentheses around the amount to show that it is negative.

Step 3 Subtract any income distributed to shareholders or equity partners.

  • Include a line on your statement that provides the amount of income distributed to shareholders or equity partners. Put the amount in parentheses or change the font color to red to indicate that this amount is subtracted from the net income.
  • For example, suppose your company had a net income of $20,000 for the period covered by your financial report. Of that amount, $10,000 was distributed to your company's equity partners. That means your company retained earnings of $10,000.

Step 4 Calculate the updated amount of retained earnings.

  • For example, if your company had $300,000 in retained earnings and you retained $10,000 of the net income earned over the period covered by your financial report, your company would now have $310,000 in retained earnings.

Creating a Balance Sheet

Step 1 Format your page into two columns.

  • Using two columns also gives you plenty of room to itemize in each category, so you don't have to use more than one page.
  • At the top of the page, across both columns, label the sheet as a "Balance Sheet" with the name of your organization and the dates for the period the balance sheet covers.
  • Your word-processing or spreadsheet program may have a balance sheet template that will make formatting easier.

Step 2 List assets in the left column.

  • Current assets include things such as cash, accounts receivable, inventory, and supplies. Fixed assets, on the other hand, are things such as real estate, equipment, and anything else that can be used for more than a year.
  • For current assets, the value is typically fairly easy to determine. For fixed assets, you may need to check the organization's last tax return to find a value. The value of fixed assets decreases each year with depreciation.

Step 3 Place liabilities and equity in the right column.

  • Current liabilities include things such as accounts payable, short-term loans, or business credit accounts. Fixed liabilities are liabilities that cannot be resolved in a year, such as mortgages, long-term loans, or employee pension plans.
  • To calculate the owner's equity, you'll need to know how much they've contributed in capital, including the total amount of any stock in the company, as well as the amount of earnings retained by the company. You can get this information from your Income Statement and Statement of Retained Earnings.

Step 4 Total assets and liabilities to balance the books.

  • In particular, review the values you used for the owner's equity. The owner's equity should always equal the total value of the organization's assets minus the total value of the organization's liabilities. If your totals don't balance, you may need to adjust the owner's equity until they do, provided all of your other values are correct.

Writing a Statement of Cash Flows

Step 1 Determine the organization's cash balance at the end of the previous period.

  • Typically, you can get this number from the organization's previous financial report. If this is the first financial report for the organization, you'll have to calculate the starting cash by totaling the organization's cash on hand.
  • "Cash" includes not just currency, but also anything that can be converted to cash in less than a year (known as "cash equivalents"). Cash equivalents include the value of savings accounts, money market funds, or similar accounts the organization owns.

Step 2 List the net income from your income statement.

  • For the purposes of your Statement of Cash Flows, it doesn't matter how much of the net income, if any, was distributed to shareholders or equity partners.

Step 3 Group your cash flows into 3 categories.

  • Operating activities include depreciation of assets, accounts payable, and accounts receivable
  • Investing activities include buying and selling capital equipment, business or website development, and buying marketable securities
  • Financing activities include issuing and redeeming debt, issuing and retiring stock, and paying dividends on stock or distributing income to equity partners

Step 4 Adjust the net income to find the cash provided by operating activities.

  • In accounts receivable and accounts payable, add any amount that occurred during the period covered by your financial report, regardless of whether or not money has exchanged hands.
  • You may have other accounts, such as taxes or payroll, that you would need to adjust income for as well. Taxes or payroll that are owed but have not yet been paid would be added to your cash balance just like the accounts payable balance was.

Step 5 Repeat the same process for investment and financing activities.

  • Indicate a loss or deficit for the period covered by your financial report by either placing the amount in parentheses or changing the font color to red (for full-color reports).
  • If your net cash is a loss or deficit, type "used for" rather than "provided by." For example, if your net cash from financing activities is a $2,400 loss, you would label this amount "net cash used for financing activities."

Step 6 Calculate the cash at the end of the period.

  • Compare your Statement of Cash Flows to your Income Statement. If there is a significant difference between the profits reported and the net cash flow generated, you may want to figure out why. For example, if your organization is relatively new and requires large capital investments, those investments would not appear on your Income Statement all at once.

How Do You Calculate Retained Earnings? . By using this service, some information may be shared with YouTube.

Expert Q&A

Alan Mehdiani, CPA

  • Most accounting software will automatically generate these reports for you based on the data you enter. [22] X Research source Thanks Helpful 0 Not Helpful 0
  • The order of the documents you prepare will change when you compile your final report, depending on your company's policies and where you need to submit the report. For example, if you were submitting your report to the U.S. Securities and Exchange Commission (SEC), you would put the Balance Sheet first, then income statements, then cash flow statements. [23] X Trustworthy Source U.S. Securities and Exchange Commission Independent U.S. government agency responsible for regulating the securities industry, which includes stocks and options exchanges Go to source Thanks Helpful 0 Not Helpful 0

how to write a financial report pdf

  • Accountants don't necessarily verify the accuracy or completeness of the information provided. If you're a small business owner, check over your data carefully to make sure that your figures are correct before you give them to an accountant or prepare your own financial reports. Thanks Helpful 0 Not Helpful 0

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Beginners' guide to financial statement.

Feb. 5, 2007

If you can read a nutrition label or a baseball box score, you can learn to read basic financial statements. If you can follow a recipe or apply for a loan, you can learn basic accounting. The basics aren’t difficult and they aren’t rocket science.

This brochure is designed to help you gain a basic understanding of how to read financial statements. Just as a CPR class teaches you how to perform the basics of cardiac pulmonary resuscitation, this brochure will explain how to read the basic parts of a financial statement. It will not train you to be an accountant (just as a CPR course will not make you a cardiac doctor), but it should give you the confidence to be able to look at a set of financial statements and make sense of them.

Let’s begin by looking at what financial statements do.

“Show me the money!”

We all remember Cuba Gooding Jr.’s immortal line from the movie Jerry Maguire , “Show me the money!” Well, that’s what financial statements do. They show you the money. They show you where a company’s money came from, where it went, and where it is now.

There are four main financial statements. They are: (1) balance sheets; (2) income statements; (3) cash flow statements; and (4) statements of shareholders’ equity. Balance sheets show what a company owns and what it owes at a fixed point in time. Income statements show how much money a company made and spent over a period of time. Cash flow statements show the exchange of money between a company and the outside world also over a period of time. The fourth financial statement, called a “statement of shareholders’ equity,” shows changes in the interests of the company’s shareholders over time.

Let’s look at each of the first three financial statements in more detail.

Balance Sheets

A balance sheet provides detailed information about a company’s assets , liabilities and shareholders’ equity .

Assets are things that a company owns that have value. This typically means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory. It also includes things that can’t be touched but nevertheless exist and have value, such as trademarks and patents. And cash itself is an asset. So are investments a company makes.

Liabilities are amounts of money that a company owes to others. This can include all kinds of obligations, like money borrowed from a bank to launch a new product, rent for use of a building, money owed to suppliers for materials, payroll a company owes to its employees, environmental cleanup costs, or taxes owed to the government. Liabilities also include obligations to provide goods or services to customers in the future.

Shareholders’ equity is sometimes called capital or net worth. It’s the money that would be left if a company sold all of its assets and paid off all of its liabilities. This leftover money belongs to the shareholders, or the owners, of the company.

A company’s balance sheet is set up like the basic accounting equation shown above. On the left side of the balance sheet, companies list their assets. On the right side, they list their liabilities and shareholders’ equity. Sometimes balance sheets show assets at the top, followed by liabilities, with shareholders’ equity at the bottom.

Assets are generally listed based on how quickly they will be converted into cash. Current assets are things a company expects to convert to cash within one year. A good example is inventory. Most companies expect to sell their inventory for cash within one year. Noncurrent assets are things a company does not expect to convert to cash within one year or that would take longer than one year to sell. Noncurrent assets include fixed assets. Fixed assets are those assets used to operate the business but that are not available for sale, such as trucks, office furniture and other property.

Liabilities are generally listed based on their due dates. Liabilities are said to be either current or long-term . Current liabilities are obligations a company expects to pay off within the year. Long-term liabilities are obligations due more than one year away.

Shareholders’ equity is the amount owners invested in the company’s stock plus or minus the company’s earnings or losses since inception. Sometimes companies distribute earnings, instead of retaining them. These distributions are called dividends.

A balance sheet shows a snapshot of a company’s assets, liabilities and shareholders’ equity at the end of the reporting period. It does not show the flows into and out of the accounts during the period.

Income Statements

An income statement is a report that shows how much revenue a company earned over a specific time period (usually for a year or some portion of a year). An income statement also shows the costs and expenses associated with earning that revenue. The literal “bottom line” of the statement usually shows the company’s net earnings or losses. This tells you how much the company earned or lost over the period.

Income statements also report earnings per share (or “EPS”). This calculation tells you how much money shareholders would receive if the company decided to distribute all of the net earnings for the period. (Companies almost never distribute all of their earnings. Usually they reinvest them in the business.)

To understand how income statements are set up, think of them as a set of stairs. You start at the top with the total amount of sales made during the accounting period. Then you go down, one step at a time. At each step, you make a deduction for certain costs or other operating expenses associated with earning the revenue. At the bottom of the stairs, after deducting all of the expenses, you learn how much the company actually earned or lost during the accounting period. People often call this “the bottom line.”

At the top of the income statement is the total amount of money brought in from sales of products or services. This top line is often referred to as gross revenues or sales. It’s called “gross” because expenses have not been deducted from it yet. So the number is “gross” or unrefined.

The next line is money the company doesn’t expect to collect on certain sales. This could be due, for example, to sales discounts or merchandise returns.

When you subtract the returns and allowances from the gross revenues, you arrive at the company’s net revenues. It’s called “net” because, if you can imagine a net, these revenues are left in the net after the deductions for returns and allowances have come out.

Moving down the stairs from the net revenue line, there are several lines that represent various kinds of operating expenses. Although these lines can be reported in various orders, the next line after net revenues typically shows the costs of the sales. This number tells you the amount of money the company spent to produce the goods or services it sold during the accounting period.

The next line subtracts the costs of sales from the net revenues to arrive at a subtotal called “gross profit” or sometimes “gross margin.” It’s considered “gross” because there are certain expenses that haven’t been deducted from it yet.

The next section deals with operating expenses. These are expenses that go toward supporting a company’s operations for a given period – for example, salaries of administrative personnel and costs of researching new products. Marketing expenses are another example. Operating expenses are different from “costs of sales,” which were deducted above, because operating expenses cannot be linked directly to the production of the products or services being sold.

Depreciation is also deducted from gross profit. Depreciation takes into account the wear and tear on some assets, such as machinery, tools and furniture, which are used over the long term. Companies spread the cost of these assets over the periods they are used. This process of spreading these costs is called depreciation or amortization. The “charge” for using these assets during the period is a fraction of the original cost of the assets.

After all operating expenses are deducted from gross profit, you arrive at operating profit before interest and income tax expenses. This is often called “income from operations.”

Next companies must account for interest income and interest expense. Interest income is the money companies make from keeping their cash in interest-bearing savings accounts, money market funds and the like. On the other hand, interest expense is the money companies paid in interest for money they borrow. Some income statements show interest income and interest expense separately. Some income statements combine the two numbers. The interest income and expense are then added or subtracted from the operating profits to arrive at operating profit before income tax.

Finally, income tax is deducted and you arrive at the bottom line: net profit or net losses. (Net profit is also called net income or net earnings.) This tells you how much the company actually earned or lost during the accounting period. Did the company make a profit or did it lose money?

Earnings Per Share or EPS

Most income statements include a calculation of earnings per share or EPS. This calculation tells you how much money shareholders would receive for each share of stock they own if the company distributed all of its net income for the period.

To calculate EPS, you take the total net income and divide it by the number of outstanding shares of the company.

Cash Flow Statements

Cash flow statements report a company’s inflows and outflows of cash. This is important because a company needs to have enough cash on hand to pay its expenses and purchase assets. While an income statement can tell you whether a company made a profit, a cash flow statement can tell you whether the company generated cash.

A cash flow statement shows changes over time rather than absolute dollar amounts at a point in time. It uses and reorders the information from a company’s balance sheet and income statement.

The bottom line of the cash flow statement shows the net increase or decrease in cash for the period. Generally, cash flow statements are divided into three main parts. Each part reviews the cash flow from one of three types of activities: (1) operating activities; (2) investing activities; and (3) financing activities.

Operating Activities

The first part of a cash flow statement analyzes a company’s cash flow from net income or losses. For most companies, this section of the cash flow statement reconciles the net income (as shown on the income statement) to the actual cash the company received from or used in its operating activities. To do this, it adjusts net income for any non-cash items (such as adding back depreciation expenses) and adjusts for any cash that was used or provided by other operating assets and liabilities.

Investing Activities

The second part of a cash flow statement shows the cash flow from all investing activities, which generally include purchases or sales of long-term assets, such as property, plant and equipment, as well as investment securities. If a company buys a piece of machinery, the cash flow statement would reflect this activity as a cash outflow from investing activities because it used cash. If the company decided to sell off some investments from an investment portfolio, the proceeds from the sales would show up as a cash inflow from investing activities because it provided cash.

Financing Activities

The third part of a cash flow statement shows the cash flow from all financing activities. Typical sources of cash flow include cash raised by selling stocks and bonds or borrowing from banks. Likewise, paying back a bank loan would show up as a use of cash flow.

Read the Footnotes

A horse called “Read The Footnotes” ran in the 2004 Kentucky Derby. He finished seventh, but if he had won, it would have been a victory for financial literacy proponents everywhere. It’s so important to read the footnotes . The footnotes to financial statements are packed with information. Here are some of the highlights:

  • Significant accounting policies and practices – Companies are required to disclose the accounting policies that are most important to the portrayal of the company’s financial condition and results. These often require management’s most difficult, subjective or complex judgments.
  • Income taxes – The footnotes provide detailed information about the company’s current and deferred income taxes. The information is broken down by level – federal, state, local and/or foreign, and the main items that affect the company’s effective tax rate are described.
  • Pension plans and other retirement programs – The footnotes discuss the company’s pension plans and other retirement or post-employment benefit programs. The notes contain specific information about the assets and costs of these programs, and indicate whether and by how much the plans are over- or under-funded.
  • Stock options – The notes also contain information about stock options granted to officers and employees, including the method of accounting for stock-based compensation and the effect of the method on reported results.

Read the MD&A

You can find a narrative explanation of a company’s financial performance in a section of the quarterly or annual report entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” MD&A is management’s opportunity to provide investors with its view of the financial performance and condition of the company. It’s management’s opportunity to tell investors what the financial statements show and do not show, as well as important trends and risks that have shaped the past or are reasonably likely to shape the company’s future.

The SEC’s rules governing MD&A require disclosure about trends, events or uncertainties known to management that would have a material impact on reported financial information. The purpose of MD&A is to provide investors with information that the company’s management believes to be necessary to an understanding of its financial condition, changes in financial condition and results of operations. It is intended to help investors to see the company through the eyes of management. It is also intended to provide context for the financial statements and information about the company’s earnings and cash flows.

Financial Statement Ratios and Calculations

You’ve probably heard people banter around phrases like “P/E ratio,” “current ratio” and “operating margin.” But what do these terms mean and why don’t they show up on financial statements? Listed below are just some of the many ratios that investors calculate from information on financial statements and then use to evaluate a company. As a general rule, desirable ratios vary by industry.

If a company has a debt-to-equity ratio of 2 to 1, it means that the company has two dollars of debt to every one dollar shareholders invest in the company. In other words, the company is taking on debt at twice the rate that its owners are investing in the company.

Inventory Turnover Ratio = Cost of Sales / Average Inventory for the Period

If a company has an inventory turnover ratio of 2 to 1, it means that the company’s inventory turned over twice in the reporting period.

Operating Margin = Income from Operations / Net Revenues

Operating margin is usually expressed as a percentage. It shows, for each dollar of sales, what percentage was profit.

P/E Ratio = Price per share / Earnings per share

If a company’s stock is selling at $20 per share and the company is earning $2 per share, then the company’s P/E Ratio is 10 to 1. The company’s stock is selling at 10 times its earnings.

Working Capital = Current Assets – Current Liabilities
  • Debt-to-equity ratio compares a company’s total debt to shareholders’ equity. Both of these numbers can be found on a company’s balance sheet. To calculate debt-to-equity ratio, you divide a company’s total liabilities by its shareholder equity, or
  • Inventory turnover ratio compares a company’s cost of sales on its income statement with its average inventory balance for the period. To calculate the average inventory balance for the period, look at the inventory numbers listed on the balance sheet. Take the balance listed for the period of the report and add it to the balance listed for the previous comparable period, and then divide by two. (Remember that balance sheets are snapshots in time. So the inventory balance for the previous period is the beginning balance for the current period, and the inventory balance for the current period is the ending balance.) To calculate the inventory turnover ratio, you divide a company’s cost of sales (just below the net revenues on the income statement) by the average inventory for the period, or
  • Operating margin compares a company’s operating income to net revenues. Both of these numbers can be found on a company’s income statement. To calculate operating margin, you divide a company’s income from operations (before interest and income tax expenses) by its net revenues, or
  • P/E ratio compares a company’s common stock price with its earnings per share. To calculate a company’s P/E ratio, you divide a company’s stock price by its earnings per share, or
  • Working capital is the money leftover if a company paid its current liabilities (that is, its debts due within one-year of the date of the balance sheet) from its current assets.

Bringing It All Together

Although this brochure discusses each financial statement separately, keep in mind that they are all related. The changes in assets and liabilities that you see on the balance sheet are also reflected in the revenues and expenses that you see on the income statement, which result in the company’s gains or losses. Cash flows provide more information about cash assets listed on a balance sheet and are related, but not equivalent, to net income shown on the income statement. And so on. No one financial statement tells the complete story. But combined, they provide very powerful information for investors. And information is the investor’s best tool when it comes to investing wisely.

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The Beginner’s Guide to Reading & Understanding Financial Statements

Business professional reading financial statements

  • 10 Jun 2020

An ability to understand the financial health of a company is one of the most vital skills for aspiring investors, entrepreneurs, and managers to develop. Armed with this knowledge, investors can better identify promising opportunities while avoiding undue risk, and professionals of all levels can make more strategic business decisions.

Financial statements offer a window into the health of a company, which can be difficult to gauge using other means. While accountants and finance specialists are trained to read and understand these documents, many business professionals are not. The effect is an obfuscation of critical information.

If you’re new to the world of financial statements, this guide can help you read and understand the information contained in them.

Access your free e-book today.

Understanding Financial Statements

To understand a company’s financial position—both on its own and within its industry—you need to review and analyze several financial statements: balance sheets, income statements, cash flow statements, and annual reports. The value of these documents lies in the story they tell when reviewed together.

1. How to Read a Balance Sheet

A balance sheet conveys the “book value” of a company. It allows you to see what resources it has available and how they were financed as of a specific date. It shows its assets, liabilities, and owners’ equity (essentially, what it owes, owns, and the amount invested by shareholders).

The balance sheet also provides information that can be leveraged to compute rates of return and evaluate capital structure, using the accounting equation: Assets = Liabilities + Owners’ Equity.

balance sheet equation

Assets are anything a company owns with quantifiable value.

Liabilities refer to money a company owes to a debtor, such as outstanding payroll expenses, debt payments, rent and utility, bonds payable, and taxes.

Owners’ equity refers to the net worth of a company. It’s the amount of money that would be left if all assets were sold and all liabilities paid. This money belongs to the shareholders, who may be private owners or public investors.

Alone, the balance sheet doesn’t provide information on trends, which is why you need to examine other financial statements, including income and cash flow statements, to fully comprehend a company’s financial position.

This article will teach you more about how to read a balance sheet .

2. How to Read an Income Statement

An income statement , also known as a profit and loss (P&L) statement, summarizes the cumulative impact of revenue, gain, expense, and loss transactions for a given period. The document is often shared as part of quarterly and annual reports, and shows financial trends, business activities (revenue and expenses), and comparisons over set periods.

Income statements typically include the following information:

  • Revenue: The amount of money a business takes in
  • Expenses: The amount of money a business spends
  • Costs of goods sold (COGS): The cost of component parts of what it takes to make whatever a business sells
  • Gross profit: Total revenue less COGS
  • Operating income: Gross profit less operating expenses
  • Income before taxes: Operating income less non-operating expenses
  • Net income: Income before taxes less taxes
  • Earnings per share (EPS): Division of net income by the total number of outstanding shares
  • Depreciation: The extent to which assets (for example, aging equipment) have lost value over time
  • EBITDA: Earnings before interest, taxes, depreciation, and amortization

Accountants, investors, and other business professionals regularly review income statements:

  • To understand how well their company is doing: Is it profitable? How much money is spent to produce a product? Is there cash to invest back into the business?
  • To determine financial trends: When are costs highest? When are they lowest?

This article will teach you more about how to read an income statement .

Related: Financial Terminology: 20 Financial Terms to Know

3. How to Read a Cash Flow Statement

The purpose of a cash flow statement is to provide a detailed picture of what happened to a business’s cash during a specified duration of time, known as the accounting period. It demonstrates an organization’s ability to operate in the short and long term, based on how much cash is flowing into and out of it.

Cash flow statements are broken into three sections: Cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities.

Operating activities detail cash flow that’s generated once the company delivers its regular goods or services, and includes both revenue and expenses. Investing activity is cash flow from purchasing or selling assets—usually in the form of physical property, such as real estate or vehicles, and non-physical property, like patents—using free cash, not debt. Financing activities detail cash flow from both debt and equity financing.

It’s important to note there’s a difference between cash flow and profit . While cash flow refers to the cash that's flowing into and out of a company, profit refers to what remains after all of a company’s expenses have been deducted from its revenues. Both are important numbers to know.

With a cash flow statement, you can see the types of activities that generate cash and use that information to make financial decisions .

Ideally, cash from operating income should routinely exceed net income, because a positive cash flow speaks to a company’s financial stability and ability to grow its operations. However, having positive cash flow doesn’t necessarily mean a company is profitable, which is why you also need to analyze balance sheets and income statements.

This article will teach you more about how to read a cash flow statement .

4. How to Read an Annual Report

An annual report is a publication that public corporations are required to publish annually to shareholders to describe their operational and financial conditions.

Annual reports often incorporate editorial and storytelling in the form of images, infographics, and a letter from the CEO to describe corporate activities, benchmarks, and achievements. They provide investors, shareholders, and employees with greater insight into a company’s mission and goals, compared to individual financial statements.

Beyond the editorial, an annual report summarizes financial data and includes a company's income statement, balance sheet, and cash flow statement. It also provides industry insights, management’s discussion and analysis (MD&A), accounting policies, and additional investor information.

In addition to an annual report, the US Securities and Exchange Commission (SEC) requires public companies to produce a longer, more detailed 10-K report, which informs investors of a business’s financial status before they buy or sell shares.

10-K reports are organized per SEC guidelines and include full descriptions of a company’s fiscal activity, corporate agreements, risks, opportunities, current operations, executive compensation, and market activity. You can also find detailed discussions of operations for the year, and a full analysis of the industry and marketplace.

Both an annual and 10-K report can help you understand the financial health, status, and goals of a company. While the annual report offers something of a narrative element, including management’s vision for the company, the 10-K report reinforces and expands upon that narrative with more detail.

This article will teach you more about how to read an annual report .

Which HBS Online Finance and Accounting Course is Right for You? | Download Your Free Flowchart

A Critical Skill

Reviewing and understanding these financial documents can provide you with valuable insights about a company, including:

  • Its debts and ability to repay them
  • Profits and/or losses for a given quarter or year
  • Whether profit has increased or decreased compared to similar past accounting periods
  • The level of investment required to maintain or grow the business
  • Operational expenses, especially compared to the revenue generated from those expenses

Accountants, investors, shareholders, and company leadership need to be keenly aware of the financial health of an organization, but employees can also benefit from understanding balance sheets, income statements, cash flow statements, and annual reports.

If you don’t have a financial background, the good news is that there are steps you can take to learn about finance and jumpstart your career . Building your financial literacy and skills doesn’t need to be difficult.

Are you interested in gaining a toolkit for making smarter financial decisions and communicating decisions to key stakeholders? Explore our online finance and accounting courses , and download our free course flowchart to determine which best aligns with your goals.

how to write a financial report pdf

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How to write an annual report: 4 tips for getting started.

How to Write an Annual Report: 4 Tips for Preparing Annual Reports

Connecting with shareholders, investors , and the public is key to growing your small business. Your annual report communicates the strength of your business, so your current shareholders can feel confident knowing how your business operates. It’s also a chance to build new relationships with investors and clients by showcasing your management, financial performance, company mission, and goals. 

Learning to write strong annual reports is important for delivering required year-end documents, but it can also help you forge personal connections. Explore the essential components of the annual report, as well as strategies for adding a creative touch that sets your business apart.

Key Takeaways

  • An annual report communicates your business affairs to stakeholders and the public
  • It typically includes mission goals, financial position, structure, and strategies
  • Depending on the size of your business, you may be legally required to provide an annual report
  • A good annual report can also be used as a marketing tool
  • Aim to create an annual report that’s clear, honest, and engaging

What this article covers:

What Is an Annual Report?

What to include in an annual report, how do you write a good annual report, why is an annual report important.

  • Frequently Asked Questions

To write an annual report, the business operations and the financial position are listed, summarized, and recorded. The annual report is a financial document businesses provide to shareholders, potential investors, and analysts. It is the best source of information about the business performance and financial well-being of a business.

Publicly traded companies are required to file annual reports to the Securities and Exchange Commission. However, small businesses and non-profit organizations also prepare yearly reports to connect with customers and provide information about yearly operations, past performance, and future goals.

Get More Out Of Your Books

The annual report is an integral part of corporate reporting. Since the annual reports are based on specific legal requirements , the items included in the report vary.

Most annual reports provide a fundamental overview of the business over the past year. The sections typically included in an annual report are an opening letter from the chairman, a business profile, an analysis by management, and financial data.

Chairman’s Letter

Annual reports usually start with an introduction and a letter from the company’s chairman, primary owner, or CEO to the shareholders providing a snapshot of the significant developments in the past financial year, company initiatives, and a brief summary of the financials. Key elements included in this section are the challenges that the business faced, its successes, and insight into the growth of the company.

A table of contents follows the section.

Business Profile

This section includes the vision and mission statement of the company, details of directors, officers, and registered and corporate office, investor profile, the products or services that are the main source of revenue for the business, competitor profile, and risk factors of the business.

Management Discussion and Analysis

The section provides an overview of the business performance over the past three years and discusses profit margins, sales, and income

If the business has launched a new product or service or there are drastic shifts in sales and marketing efforts, this section should include them. The other topics of discussion include new hires, business acquisitions, and other information that the management thinks would benefit the stakeholders.

Financial Statements

The financial statements are the most important part of the annual report that allows current and future investors, shareholders, employees, and other business stakeholders to determine how well the company has performed in the past, its ability to pay off its debts , its cash flow, and its plans for growth. The statements that are included are:

  • Balance sheet
  • Cash flow statement
  • Income statement
  • Statement to shareholders

These statements show whether the company has made a profit or loss in the past year, how much earnings it has retained, and the proportion of revenues to operational expenses the previous year. Apart from the financial statements, information about the market price of shares of the company and the dividends paid have to be provided.

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Other elements included in the year-end report are:

  • Notes to accounts with details about the accounting policies
  • Comments by auditors on the financials of the company.
  • Disclaimers about forecasted income and expenses
  • Stories, infographics, and photographs

Annual reports are important elements of a brand’s transparency and accountability. However, rather than writing a ponderous document that only a few can understand, businesses are creating annual reports that speak to a broad group of people.

These reports communicate the values and goals of the company’s mission and brand. Producing a highly visual and narrative-driven interactive annual report can help businesses connect with shareholders, investors, and customers. Aim to include visual elements throughout the entire report to keep the document engaging.

Determine the Key Message

Annual reports are a perfect opportunity to highlight your accomplishments and the impact of these accomplishments. The investors and employees want to know what you did and why you did it. By connecting your business activities and your accomplishments to the final goals and mission statement, businesses can build trust and foster long-lasting connections.

Finalize Structure and Content

One of the most difficult parts of writing an annual report is deciding what to include and leave out. It’s important to map out the report’s content and structure.

Apart from the basic elements such as the introduction, chairman’s letter, business profile, and financial statement, the annual report should have a storyline that defines the report’s overall structure and shapes the content around a narrative thread. This makes identifying and cutting out information that does not actively move the story forward easier.

Use clear, precise, and unambiguous writing. Maintain a professional and unbiased position throughout the document. The content of the annual report should be transparent and honest. Don’t inflate accomplishments or disguise the losses that you faced.

Become A Profit Prophet With Smart Reports

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Use Compelling Design

A well-designed, engaging, professional report can be used as a marketing tool by a business. Ideally, readers should be able to scan through the document and get the relevant information they need. Here are some pointers for a good annual report design:

  • Use headings and subheadings
  • Devote space to photographs, infographics, and other compelling visual elements
  • Keep the text short and simple
  • Use a bold and complimentary color scheme and layout techniques that are in sync with your brand
  • Emphasize key areas with colored text boxes, quotes, and captions

Plan in Advance

Creating an annual report is a long-term process that requires an organized system for recording and tracking data, media clipping, photographs, and a list of business achievements. While a number of companies create the annual reports in-house, others may hire a design firm to compile, proofread and finalize the document.

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Both public and private companies use annual reports to provide important business and financial information to customers, investors, employees, and the media. Here are some reasons why writing annual reports is necessary for businesses:

  • Provides an opportunity to highlight a company’s key achievements, expectations for the coming year, and overall goals and objectives
  • Gives information on the company’s financial position
  • Introduce you’re the key members of the business to stakeholders and the general public
  • Tells shareholders and employees the company’s strategy for growth in the coming year
  • Useful as a decision-making tool for managers

The annual reports keep your critical business information up to date. A failure by public companies to update the investors and the state might result in late fees or even the dissolution of your company.

Writing an annual report is essential for communicating your business position to shareholders, investors, and the public. Depending on the size of your company, you may also be legally required to produce annual reports for the Securities and Exchange Commission. 

Your annual report should include four main components: the chairman’s letter, a profile of your business, an analysis of your management strategies, and your financial statements. Adding creative elements like graphic design and a narrative can also help your annual report double as a marketing tool. Learning to create a strong annual report is essential for guiding management decisions in your company and connecting to those who support and grow your business.

FAQs on How to Write an Annual Report

How do you write an annual report for a small business.

Writing the annual report for a small business follows a similar process as writing for a large company – you should include a chairman’s letter, business profile, management analysis, and financial statements. However, since you’re writing for a smaller business, you also have more flexibility to be creative. You can tailor your report to shareholders or make it a public-oriented document that you can use to market your small business.

Who Prepares the Annual Report?

Companies may have their own in-house writing and design team, or they may choose to hire an outside firm to prepare their report. Teams usually include accounting, writing, and graphic design professionals. 

Which Things Should be Avoided while Writing a Report?

Avoid leaving your annual report to the last minute, trying to mask challenges your business has faced, or overloading the report with details and jargon. The aim is to be clear in your communication – be upfront about both your successes and losses, and write with accessible language that’s understandable to all your readers.

What are the 5 Basic Structures of a Report?

A good report can be structured in a simple 5-part setup to showcase your company’s performance. These sections are:

1. Introduction

3. Comments and disclaimers

4. Conclusion

5. References 

You’ll start with a brief overview, then provide the body of information. Comments and disclaimers should explain any claims or facts, then summarize your information in the conclusion and cite any external references.

What are the 4 components of an annual report?

There are 4 key components to include when writing an annual report:

    1. Chairman’s letter

    2. Business profile

    3. Management analysis

    4. Financial statements

You can also include creative elements like stories, infographics, and photographs to make your report more visually engaging to your target audience.

how to write a financial report pdf

Kristen Slavin, CPA

About the author

Kristen Slavin is a CPA specializing in accounting, bookkeeping, and tax services for small businesses. In addition to her 16 years experience in the accounting field, she also holds a Master’s Degree in Business Administration. In her spare time, Kristen enjoys camping, hiking, and road tripping with her husband and two children. In 2022 Kristen celebrated opening her own firm; K10 Accounting. Learn more about her services:


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37+ Sample Financial Report Templates — Word, PDF, Apple Pages

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11 Examples Of Financial Reports You Can Use For Daily, Weekly & Monthly Reports

Financial reports by datapine

Table of Contents

1) What Is A Financial Report?

2) Types Of Financial Reports

3) Annual Financial Report Example

4) Monthly Financial Reports Examples

5) Weekly Financial Report Templates

6) Daily Financial Report Examples

7) Why Do You Need Financial Reports?

8) Challenges Of Financial Reports

9) How To Make A Financial Report?

Regardless of your sector or industry, it’s likely that your finances department is the beating heart of your entire operation. Without financial fluency, it’s difficult for an organization to thrive, which means that keeping your monetary affairs in order is essential.

As a business, you need the reliability of frequent business financial reports to gain a better grasp of the status of your finances, both current and future. In addition to empowering you to take a proactive approach concerning the management of your company’s economy, these tools help assist in increasing long-term profitability through short-term company financial statements.

A robust finance report communicates crucial accounting information that covers a specified period, such as daily, weekly, and monthly. These are powerful tools that you can apply to increase internal business performance. A data-driven finance report is also an effective means of remaining updated with any significant progress or changes in the status of your finances and helps you measure your results, cash flow, and overall profitability.

Here, we will look at these kinds of tools in greater detail, delving into daily, weekly, and annual reports but focusing mainly on monthly financial reports and examples you can use for creating your own, which we will present and explain later in the article alongside their relevance in today’s fast-paced, hyper-connected business world.

What Is A Financial Report?

Financial report example showing the profit and loss status of a company

A financial report or financial statement is a management tool used to communicate the performance of key financial activities efficiently. With the help of interactive KPIs, businesses can ensure steady growth and revenue while staying compliant with law and tax regulations.

As you can see in the example above, created with a professional financial business intelligence solution, a modern finance report can have all the relevant information right at your fingertips, offering the ability to visualize as well as analyze key data; they assist in uncovering fresh insights, spotting key financial trends, identifying strengths as well as weaknesses, and improving communication throughout the organization. We will explore even more examples of monthly statements later in the article.

We live in a data-driven age, and the ability to use financial insights and metrics to your advantage will set you apart from the pack. Online reporting tools to do that exist for that very purpose. To gain a panoramic view of your business’s financial activities, working with an annual, monthly, weekly, and daily financial report template will give you a well-rounded and comprehensive overview of every key area based on your specific aims, goals, and objectives.

Your organization needs these tools to help support certain objectives and enable you to provide useful information to investors, decision-makers, and creditors, especially if you work as a financial agency and need to create an interactive client dashboard . But not only, as it can also support your business in determining the following:

  • If you can effectively generate cash and how that cash is used.
  • To reveal specific business transaction details.
  • To follow the results of your finances so you can identify potential issues that are impacting your profitability.
  • Develop financial ratios that show the position of your business.
  • Evaluate if your company can pay off all of your debts.

Daily reports, however, have a limited impact, as most of the financial KPIs that are used need mid-to-long-term monitoring and do not provide accurate information if analyzed only on a daily basis.

This is why we still mention them and provide examples of what can be tracked and analyzed every day, but for a long-term view, you should take a look at our annual, weekly, and monthly reports. The monthly ones are on top, illustrated with beautiful data visualizations that provide a better understanding of the metrics tracked.

Equipped with financial analytics software , you can easily produce these daily, weekly, monthly, and annual reports. They will provide your company with the insights it needs to remain profitable, meet objectives, evaluate your decision-making processes, and keep everyone in the value chain on track.

Your Chance: Want to test financial reporting software completely free? We offer a 14-day free trial. Benefit from great financial reports today!

Types Of Financial Reports

As stated above, finance statements are fundamental tools for businesses not only to track their performance and report to investors but also to stay compliant with law regulations that obligate them to respond to certain guidelines. That said, there are three major types, and we will cover them in detail below! 

Balance Sheet

A balance sheet is a statement that provides detailed information about a company’s assets, liabilities, and equity. Or in other words, what a company owns, owes, and is invested by shareholders. Balance sheets should portray the bigger picture of a business's financial health during a particular date. There is no mandatory frequency to generate balance sheets; some organizations prepare monthly statements, while others can do quarterly or annual ones. Let’s see each of the elements in more detail below. 

  • Assets : The items your company owns that can provide future economic benefits. This can be from cash to furniture or equipment. 
  • Liabilities : It is basically what your company owes to others. They can be divided into long-term liabilities, such as the lease of your office building or a bank loan, or short-term liabilities, which can be your credit card debt or wages to employees. 
  • Equity : It represents the shareholder’s stake in the company . To calculate the shareholders’ equity, you need to subtract the total liabilities from the total assets. This calculation is based on the general accounting equation formula: Assets = Liabilities + Shareholders' Equity. Equity is used in many different ratios, such as ROA and ROE.

An important note regarding this type of statement is that it should always be balanced, hence the name. Your total assets should always equal the total liabilities and shareholder’s equity. If this is not the case, then there must be something wrong, and it needs to be looked into. Another consideration when it comes to balance sheets is always to compare them to other similar businesses, as they will vary depending on the industry.  

Income Statement

As its name suggests, the income statement portrays the revenue generated from sales as well as all the operating expenses involved in generating that income. Essentially, how much you made and how much you spent. While a balance sheet provides a snapshot of a business's monetary health at a specific point in time, an income statement shows the profitability of a business over an accounting period (month, quarter, or year).  

Also known as profit and loss, this is a fundamental document for any business as it not only tracks performance but it needs to be presented to the fiscal authorities to ensure compliance with law regulations. The income statement focuses on 4 key elements: revenue, expenses, gains, and losses. 

  • Revenues : The revenue can be divided into operating and non-operating. On one hand, the operating one includes all income related to primary activities such as selling a product or service. On the other hand, the non-operating one is related to non-core business activities such as income from interest earned on capital lying in the bank or rental income from the business property. 
  • Gains : Essentially, gains measure the money made from other activities that are non-business related and that are a one-time-only thing. For example: selling an old machine or unused land. 
  • Expenses : All costs related to core operations. Just like revenue, expenses can be divided into primary and secondary. Primary expenses are all the ones linked to the operating revenue, while secondary ones are linked to non-operating revenue. 
  • Losses : All expenses that cost the company to lose assets. They are unusual one-time costs, such as lawsuit expenses.  

The bottom line of the income statement is the Net Income which is basically the profit of the observed period. The net income is calculated with the following formula: Net Income= (Revenue + Gains) - (Expenses + Losses) 

Cash Flow Statement 

Last but not least, the cash flow statement (CFS) portrays how much money entered and left the business during a particular time period. It basically measures how well the company manages to generate cash to pay debt obligations and cover operating expenses. While an income statement can tell you whether a company made a profit, the cash flow can tell you if it made cash. The CFS is a fundamental document for investors as it helps them understand the liquidity of a company and make informed investment decisions. 

Usually, CFS is divided into three main sections: operating activities, investing activities, and financing activities. Let’s see them in more detail. 

  • Operating activities : This refers to any sources or uses of cash from regular business activities such as sales of goods and services, interest payments, salary for employees, and tax payments, just to name a few. 
  • Investing activities: This includes any sources or uses of cash from investments which can include purchases or sales of assets, loans made to vendors, and others. 
  • Financing activities: This includes sources or uses of cash from investors and banks, such as dividends, payments for stock repurchases, and loans. 

Now that we have a better understanding of the definition and types, we are going to take a closer look at financial statements examples of daily, weekly, monthly, and annual reports and their associated KPIs. These examples will help your organization tick over the right way . Let's get started.

Annual Financial Report Example

We are hitting things off with the annual financial report. As its name suggests, these statements monitor the performance of a business for the duration of a year. They can include anything from a balance sheet, income statement, and CFS, as well as predictions for the coming year. Now we will look at an example of an interactive annual dashboard in the shape of an income statement comparing the actual vs. forecasted performance of an organization. 

Annual financial report example of an actual vs forecast income statement dashboard

**click to enlarge**

Financial forecasting is the process of using predictive analytics technologies to generate accurate predictions about future performance. This is done by analyzing a mix of historical and current data and finding patterns that can help organizations make better decisions. 

Our template above, generated with a modern dashboard maker , does just that. It starts by providing detailed information about the three most important metrics in an income statement: revenue, costs, and net profit. Each of them is displayed on a gauge chart with the actual value compared to a forecasted value, paired with the absolute and percentage difference between the two values. This way, users can quickly identify when something is lacking in performance compared to what was expected from it. 

The value of this high-level tool is the fact that it provides three months forecast based on the past 12 months performance. This allows managers to efficiently plan their strategies based on the expected costs and revenues. The dashboard also provides a breakdown of each of these metrics to analyze each element in detail. For instance, by looking at the past 6 months of the revenue breakdown chart, we can see that this business has not been reaching the forecasted amount, which means something might be going on that needs to be looked at. On the other hand, we can see that costs for marketing are slightly higher than expected, which can also be something to look into and see if these costs are justified.

Monthly Financial Reports Examples & Templates

Monthly financial reports are a management way of obtaining a concise overview of the previous month’s status to have up-to-date reporting of the cash management, profit, and loss statements while evaluating future plans and decisions moving forward.

These financial reporting examples offer a more panoramic view of an organization’s economic affairs, serving up elements of information covered in our daily and weekly explanations. By offering the ability to drill down into metrics over a four-week period, the data here is largely focused on creating bigger, more long-term changes, strategies, and initiatives.

These powerful documents offer detailed visual insights into the following areas:

  • Cash management: A comprehensive overview of your organization’s liquidity and existing cash flow situation.
  • Profit and loss: A critical glimpse into your company’s income statement and profits in a number of critical areas of the business.
  • The bigger picture: A business financial report format offers a full overview of the company’s core financing activities over a monthly period, providing data geared towards developing sustainable strategies and improvements that will foster growth and increased profitability.

Coupled with the insights delivered by daily and weekly reports, monthly ones in the form of online dashboards are pivotal to not only gaining an edge on your competitors but also getting a predictive vision that will ensure you meet – and even exceed – your financial targets indefinitely. As a result, your overall efficiency will become flawless, and you’re likely to enjoy healthy growth in your year-on-year profits.

There is a wealth of KPIs to consider when looking at a monthly financial report sample. The best way to explain them in a practical context is by getting visual.

To help you understand how you can benefit from all of this, here are 5 monthly report examples, complete with explanatory insight and a deeper insight into their respective KPIs.

These interactive financial reports examples demonstrate the detail and insight you can gain from your online data analysis if you use it in the right way.

a) Cash Management Financial Report Template And KPIs

Our first example of a financial report provides you with a quick overview of your liquidity and current cash flow situation. Good management of cash flow is fundamental for success since a healthy cash flow means that the company has enough money to pay salaries and debts and invest in growth opportunities. However, bad management can lead to the end of a business since no cash means no operations. This example is critical to keeping your finances flowing across the organization and predicting future outcomes that will help you to stay always ahead of your finances.

Monthly financial report example: cash management dashboard

The first portion of this dashboard examines the current ratio, which is simply the ratio between your current assets and liabilities. This metric demonstrates the flexibility your company has in immediately using the money for acquisitions or to pay off debts.  A really healthy current ratio would be about 2 to ensure your company will be able to pay current liabilities at any time and still have a buffer. Alongside this metric is the quick ratio, which is similar to the current ratio, except it takes into account only the near-cash assets, meaning all assets that you can convert into cash quickly, such as equipment or furniture. This means your quick ratio will always be lower than your current ratio. By monitoring these metrics, you can understand at a quick glance if your business is liquid or not. 

Next, the cash management dashboard goes more in detail into the situation of a business with two financial graphs visualizing the current accounts payable and receivable for a year, this way you can stay on top of your expenditures and money to be collected and avoid having future issues that will affect your liquidity. 

Current ratio: Core indication of a business’s short-term financial health, as well as indicating if you’re promptly collecting Accounts Due.

  • This metric is measured by dividing debt and accounts payable by cash inventory and accounts receivables.

Quick ratio: As mentioned above, this metric only takes into account the short-term assets that you can turn into money within 90 days, like your accounts receivable. The higher the ratio, the healthier the liquidity of your business. Your goal should always be to keep your quick ratio at a minimum of 1,0. 

Accounts payable turnover ratio: This shows how quickly your organization pays off suppliers and other bills. It also shows the number of times your company can pay off the average accounts payable balance during a certain time period.

  • For example, if your company purchases 10 million goods in a year and holds an average account payable of 2 million, the ratio is 5.
  • A higher ratio shows suppliers and creditors that your company is on top of paying its bills.

b) Profit And Loss Financial Reports Examples And KPIs

Moving on with our list of financial reporting templates, the P&L dashboard gives a clear overview of the income statement, from the income earned to the final net profit; the whole is enhanced by relevant performance ratios.

An income statement, also known as a P&L, is one of the most powerful examples as it gives you a detailed snapshot of your company's financial performance and tells you how profitable your business was in a specific period of time.  

Monthly financial report example showing the OPEX, EBIT, income statement, etc

The dashboard above is a perfect example of a financial statement for P&L. First, we see the income statement that starts by calculating the gross profit, which is obtained by subtracting your total revenue from your COGS. Next, we have a list of operating expenses (OPEX) that include sales, marketing, and other general administration costs. The total OPEX is then subtracted from the gross profit to reach the operating profit (EBIT). Finally, the total amount of interest and taxes are subtracted from the EBIT, resulting in the final net profit of the business. By doing these simple calculations, you can quickly see how profitable your company is and if your costs and income are being managed properly. 

Additionally, the dashboard provides a glance at performance percentages of the main metrics of the income statement: gross profit, OPEX, EBIT, and net profit. This can be further utilized to find month-to-month trends in your expenses and prepare ahead of time for months in which your expenses will be higher. 

It is important to consider that an income statement will not tell you more detailed information about your finances, such as how much money your company has in total or how much debt you have. For this purpose, there is another type of document called a balance sheet, and we will see it in more detail in our next financial statement example. 

Operating profit margin (EBIT): It allows your business to monitor how much profit you are generating for each dollar of income. This metric is also referred to as “EBIT” for “earnings before interest and tax.”

  • This metric measures how profitable your business model is and shows what’s leftover of your revenue after paying for operational costs.
  • It doesn’t include revenue earned from investments or the effects of taxes.

Operating expense ratio: This monthly example indicates the operational efficiency of your business through the comparison of operating expenses and your total revenue.

  • Essentially the lower your operating expenses, the more profitable your organization is.
  • These KPIs are particularly helpful in benchmarking your company against other businesses.

Net profit margin: Measures your business’s profit minus operating expenses, interest, and taxes divided by total revenue.

  • It’s one of the most closely monitored financial KPIs. The higher the net profit margin, the better.

COGS: The Cost of Good Sold is the total amount of money it costs you to produce your product or service. If your COGS and your revenues are too close, that means you are not making a lot of gains on each sale. 

  • Separating COGS from operating expenses is a fundamental step, as it will tell you if you are overspending your revenues in operational processes. 

c) Financial Performance Report Template And KPIs

This particular financial statement template provides you with an overview of how efficiently you are spending your capital while providing a snapshot of the main metrics on your balance sheet.

Just like the income statement, a balance sheet is another powerful tool for understanding the performance of your business. As we see in the dashboard below, a balance sheet is divided into three main areas: assets, liabilities, and equity. 

Alongside the balance sheet, the dashboard displays four other important metrics: the ROA, WCR, ROE, and DER. These four KPIs give you an immediate picture of trends in how your company’s assets are being managed. Good management of your assets and healthy equity will bring new investors to your business and will prevent you from facing disasters for unexpected losses, or bankruptcy.  

Monthly financial report template: a balance sheet is a good overview of the assets and debts of your company at a specific moment

Return on assets (ROA): This shows how profitable your businesses are compared to your total assets. Assets include both debt and equity.

  • This is a critical metric to any potential investors because it shows them how efficiently management is using assets to generate earnings.

Return on equity (ROE): Calculates the profit your company generates for your shareholders. It is used to compare profitability amongst businesses in the same industry.

  • This is measured by dividing your business’s net income by your shareholder's equity.

Debt equity ratio (DEB): This metric measures how much debt you are using to finance your assets and operations in comparison to the equity available. It is obtained by dividing the total liabilities by the stakeholder’s equity. 

d) Financial KPI Dashboard And KPIs

This financial report format created with a professional dashboard designer offers a broad overview of your business’s most critical economic activities, operating with KPIs that are developed specifically to answer vital questions on areas such as liquidity, invoicing, budgeting, and general accounting stability. A template that you can apply to almost every business across industries, this incredibly insightful tool is pivotal to maintaining a healthy, continually evolving financial profile. Let’s look at the KPIs linked to this most valuable example.

Financial statements example to calculate working capital and current ratio

Working capital: A key performance indicator focused on financial stability, this metric will help you monitor your performance based on your company's assets and liabilities.

  • In the context of this financial report format, working capital is vital as it will help you accurately gauge your business’s operational efficiency and short-term health.

Quick ratio/acid test: A KPI that offers instant insights as well as results, this metric serves up critical information concerning liquidity.

  • The quick ratio/acid test is worth tracking – by measuring these particular metrics, you’ll be able to understand whether your company is scalable and, if not – which measures you need to take to foster growth.

Cash conversion cycle: Your cash conversion cycle (CCC) is a critical metric for any organization as it drills down into key areas of your company’s operational and managerial processes.

  • Tracking your CCC with visual BI reporting tools is incredibly useful as it provides a quantifiable means of knowing the length of time it takes for your business to convert its inventory investments, in addition to other resources, into cash flows from sales.
  • A steady, consistent CCC is generally a good sign, and if you spot noticeable fluctuations, you should conduct further analysis to identify the root of the issue.

Vendor payment error rate: Every business – including yours – works with third-party vendors or partners, and managing these relationships as efficiently as possible is critical to any organization’s ongoing financial health. That’s where the vendor payment error rate KPI comes in.

  • By gaining an insight into potential errors or efficiencies relating to the payment of your vendors, you’ll be able to improve financial flow and efficiency while nurturing your most valuable professional relationships.
  • If your vendor error rate is high, you will know that procurement inefficiencies exist, and you’ll be able to take appropriate action to improve your processes and avoid potential disputes.

Budget variance: Budgeting is one of the cornerstones of corporate financial health. This powerful KPI from this most critical financial report sample serves to express the difference between budgeted and genuine figures for a particular accounting category.

  • Offering a quick-glance visualization of whether particular budgets are on track in specific areas and departments, this KPI allows you to get a grasp of variances between proposed and actual figures while obtaining the information required to make vital changes in the appropriate areas.
  • Keeping your budget expectations and proposals as accurate and realistic as possible is critical to your company’s growth, which makes this metric an essential part of any business’s reporting toolkit.

e) Financial Statement Example For CFOs

Next, we look into a financial performance report focused on data relevant for CFOs that need to grasp high-level metrics such as revenue, gross profit, operating expenses, net income, berry ratio, EVA, payroll headcount ratio, and, finally, to build a strong team and customer base, satisfaction levels of each. This financial management report example will not only serve as a roadmap for depicting the monetary health of a company but also focus on team management and customer satisfaction, which are not traditional finance-related metrics but are important in this case for every modern CFO. This example shows the YTD until March, but it can also be used as one of our monthly financial statements examples. We will explain the KPIs in more detail below:

A financial report template showing key metrics such as revenue, gross profit, cost breakdown, berry ratio, payroll headcount ratio, etc.

Berry ratio: This ratio is defined between gross profit and operating expenses (costs). This financial indicator is critical when showing if the company is generating a healthy amount of profit or losing money.

  • When calculating the berry ratio, usually external income and interest aren't included, but depreciation and amortization could be, depending on the particularities of your strategy.
  • An indicator over 1 means that the company is making a profit above all expenses, while a coefficient below 1 will indicate that the company is losing money.

Economic value added (EVA): Referred to as the economic profit of a company, EVA is a critical element to include in any finance report template as it will show the surplus profit over the WACC (weighted average cost of capital) demanded by the capital market.

  • By gaining insights into the potential surplus and how profitable a company's projects are, the management performance can be reflected better. Moreover, it will reflect the idea that the business is profitable only when it starts to create wealth for its shareholders.
  • Succinctly speaking, the financial statement should include EVA as it will show how much and from where a company is creating wealth.

Cost breakdown: This particular metric is extremely important in any finance department since costs are one of the financial pillars of an organization, no matter how large or small. Every organization needs to know where the costs are coming from in order to reduce them and, consequently, positively affect performance.

  • If you see that most costs come from administrational activities, you should consider automating tasks as much as possible. By utilizing self service analytics tools , each professional in your team will be equipped to explore and generate insights on their own without burdening other departments and saving countless working hours.
  • Generally, costs should not be looked upon purely on the basis of black and white. If sales and marketing cause cost increment, maybe they also deliver high volumes of income so the balance is healthy and not negative.

Satisfaction levels: C-level managers need to prepare financial analysis reports with satisfaction levels in mind. These indicators are not purely financial, but they do influence economics and can cause potential bottlenecks.

  • If the financial team has a lower satisfaction level, you need to react fast in order to avoid potential talent loss that can cause the company serious money. Keeping the team satisfied by conducting regular feedback talks, and offering career progression and competitive salaries, for example, can only affect the business in positive ways since the motivation will rise as well as the quality of the working environment. In this case, you can also connect to an HR dashboard and follow the team's performance and satisfaction levels in more detail.
  • If customers are unsatisfied, it can also cause damages from outside your team that can, consequently, influence financial performance. For this reason, customer service analytics should also be an important aspect to be covered in your CFO report .

The above example of financial statement is not only focused on pure numbers, as you can see, but also on the human aspect of team and customer management that every modern CFO needs to take into account in order to benefit strategies and deliver economic growth.

f) Financial Report Template For Operating Expenses

Last but not least, on our list of monthly financial statement examples, we have a template that focuses entirely on operating expenses analysis.  Operating expenses also referred to as OpEx, are all expenses that companies incur through their day-to-day operations. Such as rent, equipment, inventory, salaries, insurance, materials, marketing, sales, and much more, depending on the industry. It is fundamental for businesses to track their OpEx closely and regularly as they directly affect profitability. An organization that manages to keep its OpEx at a minimum while still maintaining profitability and efficiency stands to gain a massive competitive advantage. 

Our example below will help you do just that by providing a complete overview of the development of your OpEx on a month-to-month basis. Let’s explore it in detail below. 

Financial report for operating expenses analysis

* *click to enlarge**

The value of this template lies in its level of detail. Traditional income statements track all OpEx together without differentiating between fixed and variable ones. Making it harder to extract deeper conclusions from the data. Our OpEx report above differentiates fixed and variable expenses and shows the monthly development of both compared to the performance of the previous year. This way, users can extract valuable conclusions to improve their strategies and overall financial performance. For instance, by looking at the OpEx development chart on the top, we can see that, overall, both fixed and variable expenses are higher compared to the benchmark. This can be because the company is producing more goods and services, which would result in higher costs or something else that needs to be looked into in more detail. 

To do so, you can take a look at the operating ratio and net profit margin development chart. These are the success indicators that will help you understand if your cost-optimization strategies are paying off. There, we can observe a positive development in previous months with a decrease in the last observed period. Again, this could either be expected or something to be alarmed. It is important to take a deeper look into the data to ensure no big insights remain untapped. 

If you are still feeling a bit lost about the KPIs shown in this example, let’s talk about them in detail below. 

  • Variable expenses : These are costs that are directly related to a business’s production levels. Meaning they can increase or decrease regularly, hence, the name variable. They include costs such as raw materials, labor costs, distribution and shipping, packaging, and sales commissions, among others. It is important to note that variable expenses can not be compared to any other company as they vary from industry to industry. 
  • Fixed expenses : As its name suggests, these are all expenses that need to be mandatorily paid every month, quarter, or year. They are not subjected to the production level but more to the functioning of the business. These include salaries, insurance, rent, and taxes, just to name a few. 
  • Operating ratio : This KPI shows your operating expenses as a percentage of the total revenue. It shows the ability of an organization to keep costs low while generating revenue. This means the lower the ratio, the more profitable the organization is.

Weekly Financial Report Templates And KPIs

A weekly financial statement serves to help you monitor all your short-term financial activities in weekly increments. It should be created and reviewed each week and provides a comprehensive look at the short-term performance of your business.

Now we will take a look at some financial statements examples to get a clearer picture of what can be tracked in weekly intervals.

a) Operating Cash Receipts, Disbursements, Balance

Part of a business’s budgeting process may include cash receipts and disbursements, which use actual data for cash collection to design a budget or create income statements, for example. A sample financial report on a weekly basis can help companies gain insights from accurate reporting based on using cash receipts and disbursements. Metrics and KPIs can include:

Cash flow: indicates the changes in cash versus its fixed counterparts, such as exactly where cash is used or generated during the week.

  • Operating activities: measures a business’s operating cash movements, whereby the net sum of operating cash flow is generated.
  • Financing activities: tracks cash level changes from payments of interest and dividends or internal stock purchases.
  • Investing activities: tracks cash changes derived from the sale or purchase of long-term investments, like property, for example.

Operating activities: indicated any activities within a business that affect cash flows, such as total sales of products within a weekly period, employee payments, or supplier payments.

  • Direct method: This metric obtains data from cash receipts and cash disbursements related to operating activities. The sum of the two values = the operating cash flow (OCF).
  • Indirect method: This metric uses the net income and adjusts items that were used to calculate the net income without impacting cash flow, therefore converting it to OCF.

Gross profit margin: This enables your business to measure and track the total revenue minus the cost of goods sold, divided by your total sales revenue.

  • This KPI is a crucial measurement of production efficiency within your organization. Costs may include the price of labor and materials but exclude distribution and rent expenses.
  • For example, if your gross profit margin were 30% last year, you would keep 30 cents out of every dollar earned and apply it towards administration, marketing, and other expenses. On a weekly basis, it makes sense to track this KPI in order to keep an eye on the development of your earnings, especially if you run short promotions to increase the number of purchases. Here is a visual example:

Weekly financial report example showing the gross profit margin in a gauge chart

b) Any Generated Current Receivables

Weekly financial reports can help businesses stay on top of invoicing, billing procedures, cash basis of accounting, and accounting records, and ensure that they don’t fall behind on being paid for services and goods that are owed to them by customers or suppliers. Weekly report metrics and KPIs include:

  • Days sales outstanding (DSO): This measures how fast your business collects money that you’re owed following a completed sale. DSO = (Accounts receivable/total credit sales) x number of days in the period.
  • DSO vs. best possible DSO: Aligning these two numbers indicates the collection of debts in a timely fashion. Best possible days sales outstanding = (Current receivables x number of days in a week) / weekly credit sales.
  • Average days delinquent: Indicates how efficient your business processes are in your ability to collect receivables on time. ADD= Days sales outstanding – Best possible days sales outstanding

Top Daily Financial Report Examples And KPIs

A daily financial report is a method to track the previous day’s activities that have an impact on your accounting status but are not necessarily a strict financial metric. It can keep you apprised of all the requisite data management used to track and measure potential errors, internal production, revenue loss, and receivables' status.

As we mentioned above, these ones provide a limited vision, but you can use the examples below to see how some daily actions on problematic factors can impact your final results.

a) Tracking Potential Staff Errors

Maintaining an efficient, productive work environment and ensuring that you can identify any employee discrepancies or issues is critical to being proactive about business growth. Monitoring employees working hours and productivity levels can help you detect potential staff errors quickly, control these errors, and avoid negative impacts on your financial results at the end of the day and, ultimately, the month.

Real-time management live dashboards offer clear visuals regarding employee management processes with the following metrics and KPIs:

Organizational performance: These are key metrics for tracking and evaluating some factors impacting your performance.

  • Employee overtime: overtime per employee = total overtime hours / FTE
  • Absenteeism: Number of employees absent today

Work quality: These metrics help companies determine the quality level of their employees’ work performance.

  • Amount of errors
  • Product defects

Work quantity: These metrics indicate employee performance related to quantity, such as sales figures or the number of codes a programmer can create in a given amount of time. Quantity does not, of course, mean quality, but on monitored daily, it can reveal bottlenecks or under-production problems.

  • Sales numbers: the number of client contacts, the number of calls an employee makes, and the amount of active sales leads.
  • Units produced: lines produced during coding, number of keys a nurse receptionist can hit per minute, etc.
  • Customer handling time: how many customer calls are answered during a specific time period, for example.

b) Measure Revenue Loss & Receivables

By tracking staff errors, you can track the money it costs your company (having a problem in production, finding the problem, and fixing it), which will inevitably end up in your financial statements as the money you lost. Tracking revenue loss can be especially beneficial for those companies with customer accounts or recurring income. A daily record helps businesses quickly monitor revenue-related factors so that they can increase their earnings. Revenue loss can also originate from one-time purchases, customers who move to your competitor, or customers who move out of the area. Metrics used to measure these factors can include: 

Accounts receivable turnover ratio: This measures the number of times that your business is able to collect average accounts receivable and indicates your effectiveness in extending credits. Here is a visual example:

Daily financial report example showing the accounts receivable turnover on a pie chart

  • A low accounts receivable turnover ratio basically indicates that you might need to revise your business's credit policies to collect payments more quickly.

Additional metrics you can monitor on a shorter time frame, such as daily, are as follows:

  • Number of daily transactions
  • Average gross margin
  • The average cost per order

You can also be more specific about your revenue loss: categorizing where you lost what a good practice to identify which parts of your business management reporting practices have important room for improvement is. Tracking metrics like the top 10 products generating the most revenue or, on the contrary, the top 10 products generating the worse revenue will tell you a story about what needs more attention.

The revenue loss can also come from discounts or sales, for example. Monitoring on a daily basis which promotions are getting “too” popular can help you stop it before it generates more revenue loss than revenue growth that was supposed to create.

A daily, weekly, and monthly record help communicate the ongoing narrative of your company's economic processes, strategies, initiatives, and progress. As you can see, this form of an analytical report in the finance industry is an undeniably potent tool for ensuring your company’s internal as well as external financial activities are fluent, buoyant, and ever-evolving.

Why Do You Need Financial Reports?

Why do you need financial reports?: 1. Financial performance tracking, 2. Tracking errors, 3. Showing financial condition, 4. Debt management, 5. Staying compliant with tax laws

We saw some powerful financial statement templates to empower your business, but before finishing our journey through these tools, we are going to show you some of the main ways in which your business could benefit from them. As we mentioned a few times through this article, interactive reports created with professional business analytics tools offer a clear snapshot of your business’s financial health, and they will give you the answers you need to plan strategies and tackle any issues that might arise with your finances. Here are the top 5 benefits. 

  • Performance tracking: If you are a loyal reader of this blog, then you know the importance of relying on data for business success. By using modern financial performance reports, CFOs, and other relevant stakeholders can have a quick and accurate snapshot of all areas of a business. This will help them make more informed decision-making as well as plan strategies and forecast future results to find growth opportunities. 
  • Mitigating errors: When we are talking about finances, every detail counts. Using inaccurate statements can not only damage your business’s profitability but can also expose it to legal issues if any discrepancies are found in your numbers. Many BI finance tools in the market ensure accurate reporting with the latest data available. This way, you will be able to constantly monitor the performance of your finances in every area and mitigate any errors before they become bigger issues.  
  • Showing financial condition to investors and stakeholders: If you have investors or you are looking for potential ones to expand your business, then a report showing a snapshot of your business performance will be a fundamental tool. On one hand, it will help you show your investors where their money went and where it is now, and on the other, it will show potential new investors or other relevant stakeholders that your business is worth their money.
  • Debt Management: As we mentioned in one of our examples of financial statements, wrong debt management can damage a business to the point of no return. Investing in innovative BI solutions to generate professional statements that contain a detailed balance sheet of your assets and liabilities can help you understand your liquidity and manage your debts accordingly.  
  • Staying compliant with tax laws: Last but not least, one of the most important benefits of using finances reporting is to stay compliant with the law. No matter the size of your company, you have to pay taxes, and tax agents will use your financial documents to make sure you are paying your fair amount. By keeping track of this information in a professional financial status document, you will be able to reduce your tax burden and avoid any discrepancies in your numbers. 

Common Challenges Of Financial Statements

While these tools are fundamental to the growth and correct functioning of any type of organization that profits, it is still a hard process that has limitations. Being aware of the challenges coming your way can help you tackle them and be prepared to generate accurate financial statements. Let’s look at some of these limitations. 

  • Manual work : Manual tasks are the enemy of a successful reporting process. Especially with finances, where you need to make important decisions all the time, the need for real-time reporting is critical. However, there are still many companies that build their statements manually, which means by the time it is ready, the data is no longer useful. With that issue in mind, several automated reporting tools have emerged to help mitigate the manual tasks and dedicate more time to actually analyzing.  
  • Manage various data sources : Data quality is the basis of a successful reporting process. When it comes to generating finance reports, it is necessary to gather data from various sources, which can be a tedious job. The issue becomes even bigger when you want to process and unify all of this information for analysis. Luckily, modern management reporting tools allow you to connect various data sources and visualize them all together in interactive dashboards with just a few clicks.  
  • Data literacy: Data literacy refers to the ability to understand, communicate and work with data. It represents a challenge for any reporting process, but especially when it comes to finances, as the numbers and concepts are more complex. To prevent literacy levels from becoming a bigger issue, it is recommended to assess the level of knowledge across employees and departments and provide financial and data-related training for anyone who needs it. This way, you’ll ensure everyone is on the same page and has the ability to integrate analytical practices into their daily operations. 
  • Accessibility and collaboration : It is very likely that an organization’s financial goals will be linked across departments and teams. Achieving these goals successfully requires a level of collaboration that is harder to achieve, especially when it comes to sharing reports and building discussions around them. If these documents are not properly shared, it is very possible that discrepancies will be found in the strategies, and that can damage the end goal. To avoid this, organizations need to rely on analytical tools with an online environment that allows them to easily share relevant information among different stakeholders in a fast and efficient way.  
  • Adapt to regulatory changes : Paired with the challenges coming with the data management process, there are also regulatory changes that happen all the time, and that can present a challenge for organizations. Businesses need to ensure their financial reports are rigorously complying with regulations as well as be flexible and responsive to any new changes that might arise. 
  • Security : With cyberattacks and data breaches becoming an increasing concern for businesses, keeping financial data secure becomes a major challenge for organizations. To prevent your information from ending up in the wrong hands, it is necessary to implement various security measures such as access controls, password-protected reports, and other things.  

How To Make A Financial Report?

How to make a financial report: tips and best practices by datapine

To create a comprehensive financial statement, you need to keep these points in mind:

1. Define your mission and audience

No matter if you're a small business or a large enterprise, you need to define your goals clearly and what you are trying to achieve with the report. This can help both internal and external stakeholders who are not familiarized with your company or finances. If you're creating an internal report just for the finances department, it would make sense to include financial jargon and data that, otherwise, would create challenges for external parties to follow.

By defining the mission and audience, you will know how to formulate the information that you need to present and how complex the jargon will be. Create a draft of the most important statements you want to make, and don't rush with this step. Take your time; the numbers, charts, and presentations come later.

2. Define goals and targets

Once you’ve defined your mission and the audience of your reports, it is time to set some goals and targets to use as benchmarks to measure the success of your financial strategies. This is an important step because goals help organizations plan their expected growth and improve based on that. 

That said, there are a few steps you should follow to ensure you are setting accurate objectives. For starters, your goals and targets should be long and short-term but, most importantly, attainable. Many businesses fail in their analytical efforts because they take industry benchmarks, for example, as the end goal for their own performance. Now, while industry values are good benchmarks and they shouldn’t be discarded entirely, they should still be looked at with a grain of salt. Be honest with yourself and with the current scenario of your business, and define targets that are realistic and attainable. Consider your budget, your business size, your historical performance, and other elements to build efficient goals that are measurable in time.  

3. Identify your metrics

In this step, you need to identify the key performance indicators that will represent the financial health of your company and help you measure the goals you defined in the previous step. Depending on the selected metrics, you will need to present the following:

Balance sheet: This displays a business’s financial status at the end of a certain time period. It offers an overview of a business’s liabilities , assets, and shareholder equity.

Income statement: This indicates the revenue a business earned over a certain period of time and shows a business’s profitability. It includes a net income equal to the revenues and gains minus the expenses and losses.

Cash flow statement: Details a business’s cash flows during certain time periods and indicates if a business made or lost cash during that period of time.

These financial statements will help you get started. Additionally, you might want to consider specific KPIs and their relations. Gross profit margin, operating profit margin, operating expense ratio, etc., all have different applications and uses in a relevant data story. Take your time to identify the ones you want to include in order to avoid multiple repeats afterward.

4. Choose the right visualizations

Continuing on our previous point, after specifying the financial statement and metrics you want to add, it's time to include visuals. This point is important since the average reader will struggle to digest raw data, especially if you work with large volumes of information.

The type of chart is important to consider since the visuals will immediately show the relationship, distribution,  composition, or comparison of data. Therefore, the type of charts will play a significant role in your reporting practice. Here is a visual overview that can help you identify which one to choose:

Overview to use the right data visualization types for comparisons, compositions, relationships and distributions

In the overview, we can see that scatter plots and bubble plots will work best in depicting the relationship of the data, while the column chart or histogram is the distribution of data. To learn more about a specific chart and details about each, we suggest you read our guide on the top 30 financial charts .

5. Apply design best practices 

By now, you have the planning of your report ready. The next step is to bring everything to life by generating the actual report. Choosing the right chart type is the first step, but there are other design best practices that should be followed to ensure the process is as efficient as possible. 

The first and most important best practice is to avoid overcrowding your reports. Putting too much information in them will make everything confusing and harder to understand, which can translate into poor strategic decisions for the future. Prioritize the most important KPIs that enable you to tell a story about your performance as well as some context to make sense of the information. Arrange your charts in a way that makes sense, and that helps the audience understand everything. 

Another important design best practice is to think carefully about colors. While it is very tempting to use a different color for every KPI, it is not recommended to do this. You should stick to only a few colors that are not too strong. You can even use different shades of the same color to differentiate data points, as you saw in our examples section. It is also a good practice to use your business’s color palette to make it more personalized and familiar to the audience. 

6. Use interactive features 

Traditionally, finance reporting has been a static practice that mainly contained outdated data that was not entirely valuable. As you’ve learned throughout this post, this is no longer the case. Today, these reports contain a mix of real-time and historical insights that enable decision-makers to extract insights and act on them as soon as they occur. Part of the success of this modern approach relies majorly on interactivity. That is why our next best practice or tip is to integrate interactive features into the process. 

Tools such as datapine offer a range of interactive functionalities to integrate into your financial reports. For instance, you can add different tabs with extra information and have it all together in a single report. This way, you’ll avoid overcrowding the report or having to generate multiple different ones. Plus, if you need to visit another tab quickly, you have the option to link that tab to a specific KPI and be transferred to it just by clicking on the chart. 

Another interactive feature that makes the reporting process way more efficient is drill downs and drill throughs. They basically enable users to go into lower or higher levels of data, respectively, without the need to jump into another chart. For example, if you are looking at revenue by country but want to dig deeper into a specific country, you can click on it, and the chart will adapt to show revenue by city of that country. The same thing can be done upwards to look at revenue by continent. 

7. Use modern software & tools

To be able to manage all your finance reports effectively, you will need professional tools. The traditional way of reporting through countless spreadsheets no longer serves its purpose since, with each export, you manage historical data and don't have access to real-time insights. The power of a modern dashboard builder lies within the opportunity to access insights on the go, in real-time, and with refreshing intervals that you can set based on your needs.

Moreover, professional dashboard software comes with built-in templates and interactivity levels that traditional tools cannot recreate or offer in such simplicity but, at the same time, a complexity that will make your report more informative, digestible, and, ultimately, cost-effective.

To manage financing performance in comparison to a set target, you can also use a modern KPI scorecard . That way, you will not only monitor your performance but see where you stand against your goals and objectives.

8. Automate your financial management report

Automation plays a vital role in today's creation of company financial reports. With traditional reporting, automation within the application is not quite possible, and in those scenarios, professionals usually lose a lot of time since each week, month, quarter, or year, the report needs to be created manually. Automation, on the other hand, enables users to focus on other tasks since the software updates the report automatically and leaves countless hours of free time that can be used for other important tasks.

For example, you can schedule your financial statement report on a daily, weekly, monthly, or yearly basis and send it to the selected recipients automatically. Moreover, you can share your dashboard or select certain viewers that have access only to the filters you have assigned. Finally, an embedded option will enable you to customize your dashboards and reports within your own application and white label based on your branding requirements. You can learn more about this point in our article, where we explain in detail the usage and benefits of professional white label BI and embedded analytics.

9. Stay Compliant

We already mentioned the regulatory side of financial reporting a couple of times throughout this post, but it is such an important step that we could not leave it out of this list. That is because companies that fail to meet the governmental requirements for their finance statements can face critical consequences that will throw all other efforts down the drain. 

In this sense, there are different requirements depending on the country or continent. In the USA, companies need to adhere to the GAAP guidelines, which basically provide a set of rules and standards for entities to prepare their reporting in a consistent and transparent way.  On the other side, countries from the EU need to follow the IFRS rules. Which obligates listed companies to follow a set of rules to prepare their statements. The IFRS guidelines provide a common language used by more than 100 countries. Through that, UE regulators can compare organizations across “international boundaries.”

10. Learn from the process

This might sound like an obvious step, but it is often overlooked. Once you are done generating your financial report, you should gather internal feedback from employees and any other relevant users and learn from the process. There is no secret recipe for the perfect finance report. Each company has different needs and resources. Therefore, tweaking little details to make the process efficient and easier for everyone involved can reap significant rewards in the future.  

As you’ve learned through this list of best practices, these tools are more digestible when they are generated through online data visualization tools that have numerous interactive dashboard features to ensure that your business has the right meaningful financial data. Finally, these statements will give your business the ability to:

  • Track your revenue, expenses, and profitability.
  • Make predictions based on trusted data.
  • Plan out your budget more effectively.
  • Improve the performance of your processes.
  • Create fully customizable reports.

Comprehensive Reports For The Complete Financial Story Of Your Business

We’ve explained how to write a financial report, examined the dynamics of a monthly, daily, and weekly report templates, and explored examples relating to specific areas of the business with their related KPIs as well as some key benefits. Now, it’s time to look at the concept as a whole.

Financial reporting practices help your business obtain a clear, comprehensive overview of where your company is at and where you should plan on going. When augmented with crisp, easy-to-read visualizations in the form of financial dashboards , your business can quickly comprehend and accurately measure critical components of your status over specified time periods.

A financial statement template, as we presented above, can also help you answer critical questions, such as What can your business do with an extra $500k in cash? Will you be able to borrow less money, invest in new technology, or hire trained personnel to improve your sales?

Using datapine’s seamless software, your business will be able to see the full financial story of your company come to life and have a better grasp of your future path.

When it comes to your business’s finances, shooting in the dark or using antiquated methods of analysis or measurement will not only stunt your organizational growth but could lead to mistakes, errors, or inefficiencies that will prove detrimental to the health of your business. Data-driven dashboard reporting is the way forward, and if you embrace its power today, you’ll reap great rewards tomorrow and long into the future.

Do you want to improve your business’s financial health today? Try our 14-day trial completely free!

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how to write a financial report pdf

In the world of business finance, it is crucial to clarify the facts and provide accurate assessments and overviews for investors, shareholders, and even employees. One of the most common channels for companies to provide financial performance transparency in accounting reporting. As a result, you have to prepare proper accounting reports .

This article starts with the accounting report’s definition and meaning and then lists the company’s three most important accounting reports. And also, an effective method for generating accounting reports by using professional reporting tool will be introduced.

how to write a financial report pdf

What are Accounting Reports?

Accounting report examples: 4 types of accounting reports, why visualize accounting reports, anyone can build impressive reports within 10 minutes, report automation frees you from repetitive tasks.

Accounting reports are powerful tools that can provide you with periodic statements on a company’s financial status within a specific time or period. They are compiled based on financial information derived from business accounting records. You can check the company’s finance’s health and infer insights about your business from accounting reports.

An accounting report should be quantitative as accounting itself is all about numbers. Also, accounting reporting has financial nature. Usually, some people consider accounting reports to be equivalent to financial statements. Last but not least, accounting reports are very important in terms of management, law, evaluation, and many other aspects. Therefore, they must be readable, clear and accurate.

An accounting report can be brief or comprehensive or customized for a specific purpose.

Financial accounting reports are to reveal important information to the outside. You are telling them how much money your company made or lost. Here are the three most common accounting reports that you should know about.

Note: All the financial accounting reports templates shown in the article is made by reporting tool FineReport . FineReport is a leading reporting tool in the industry, capable of quickly and easily creating all kinds of complex reports. In FineReport, there are many built-in accounting report templates that can be applied with just one click.

Income statement

Income statements tell you how profitable your business was during a given reporting period. A typical income statement contains three parts: total revenue, total expenses, and net income.

The income statement starts from the total income received in a certain period and then subtracts expenses to obtain profit and loss. The idea is to get an overview of everything that influences your bottom line. 

Accounting Reports Type 1: Income statement made by FineReport

As a general rule, the reporting period covers yearly or quarterly.

Cash flow statement

The cash flow statement, or the statement of cash flows, summarizes the cash and cash equivalents that moved in and out of a company. It is the most accurate source of information regarding the cash generation ability of your business.

The cash flow statement’s primary sources are cash from operating activities, investing activities, and financing activities.

As a bridge connecting the income statement and balance sheet, cash flow statements are a mandatory part of a company’s financial reports.

Accounting Reports Type 2: Cash flow statement made by FineReport

Balance sheet

A balance sheet displays a company’s assets, liabilities, and equity balances as of the balance sheet date. This report is used to evaluate the liquidity and financial reserves of a business. 

The balance sheet is based on the fundamental equation: Assets = Liabilities + Equity. As such, a standard company balance sheet is divided into two sides: assets on the left and financing on the right–which itself has two parts: liabilities and ownership equity.

Accounting Reports Type 3: This is a Balance sheet  made by FineReport.

General ledger

The general ledger classifies and summarizes all transactions and is composed of each account required in the account book. In the general ledger, debit and credit are used to show the balance between accounts. Generally, companies use general ledger reports as the basis for accounting reports and financial statements.

It is essential to track the financial status of a business and its evolution over time. Therefore, regardless of the size of the company, accounting reports are an important business element. They allow assessment of the current situation compared to the previous and/or forecast. For investors, financial institutions, or tax authorities, a readable report is also extremely important.

When digital technology is more and more widely used in business, managers are faced with an increasing amount of data. They must quickly extract valid information from massive amounts of data and make reasonable decisions. Visualizing all this information by creating and managing accounting reports is a way to deal with this data overload and improve the quality of decision-making.

In addition, visual financial statements are a powerful way to communicate all your work to anyone in an easy-to-understand and easy-to-access way. It will help you discover potential problems or pain points and translate them better to the outside world.

How to Generate Accounting Reports Effectively

Now we are sure that companies are responsible for providing three main accounting reports: the cash flow statement, income statement, and balance sheet. But there is a catch: How to create these accounting reports in an efficient way?

If the data amount is tiny, you can use Excel to make accounting statements. But please keep in mind that Excel has limited processing performance for large amounts of data, and it is hard to update in a real-time manner.

When it involves a large volume of data, professional software such as FineRepor t is definitely a better choice. 

Within only three steps, you can create an accounting report by FineReport.

01 Connect to data sources.

You can conveniently integrate data from different databases, build and customize reports via the excel-like interface without messy scripting or coding. FineReport adopts a drag-and-drop operation and an excel-like interface so that every accountant can get started smoothly. 

FineReport can connect to various data sources so accountants can integrate raw data to make accounting reports effectively

02 Use the template and put in the data.

You can directly apply pre-designed templates without having to repeat the work again and again. To bind data columns to cells, you simply need to drag each data column from the datasets and drop them in the corresponding cells. FineReport provides useful functions covering almost all the scenarios in work. You can use them directly or customize your own functions.

03 Design the format and style .

To polish up your report, you can modify the style or add parameters such as “year” and “region” to make it more interactive and attractive.

To make the accounting reports more dymatic and engaging, the tip is to add parameters to be more interactive

Raw data is unable to speak, and it is always not easy to find accurate conclusions quickly from messy financial data. Luckily, I have provided a more detailed tutorial on design logic and hands-on procedures. If interested, You can read 3 Steps to an Effective Financial Statement Analysis for more information.

FineReport helps automate the process of generating accounting reports and dashboards. With various built-in templates in Finereport, you can directly apply them without any additional effort.

Below I use the FineReport built-in template to create a profit center dashboard.

Profit center -dashborad by FineReport

Timing scheduled function allows you to quickly and easily set up daily, monthly, quarterly, annual reports, and other tasks without repetitive work. The latest financial statements can be created automatically based on real-time data and regularly pushed to your manager by email or text message.

Meanwhile, it is easy to export or print the reports in various formats, such as Excel, PDF, PNG, etc., or schedule reports sending via email.

The following are financial dashboards made with FineReport. The three design modes in FineReport can satisfy all scenario needs in the enterprise, no matter periodic reports, complex reports, or dashboards.

If you are interested, why not download and have an excellent visualization trial?

Example: Financial index analysis dashboard by FineReport

Accounting reports allow the reveal of accounting information in an easily readable format. The most basic accounting reports are income statements, cash flow statements, and balance sheets.

Making these reports is not easy for novices and often tedious even for experienced accountants. FineReport provides an automated solution to the complex process of generating accounting reports and dashboards.

Explore Other Resources

how to write a financial report pdf

How to Write a Report: A Guide

Matt Ellis

A report is a nonfiction account that presents and/or summarizes the facts about a particular event, topic, or issue. The idea is that people who are unfamiliar with the subject can find everything they need to know from a good report. 

Reports make it easy to catch someone up to speed on a subject, but actually writing a report is anything but easy. So to help you understand what to do, below we present a little report of our own, all about report writing. 

Communicate with confidence Grammarly helps you write the way you intend Write with Grammarly

What is a report? 

In technical terms, the definition of a report is pretty vague: any account, spoken or written, of the matters concerning a particular topic. This could refer to anything from a courtroom testimony to a grade schooler’s book report . 

Really, when people talk about “reports,” they’re usually referring to official documents outlining the facts of a topic, typically written by an expert on the subject or someone assigned to investigate it. There are different types of reports, explained in the next section, but they mostly fit this description. 

What kind of information is shared in reports? Although all facts are welcome, reports, in particular, tend to feature these types of content: 

  • Details of an event or situation
  • The consequences or ongoing effect of an event or situation
  • Evaluation of statistical data or analytics
  • Interpretations from the information in the report
  • Predictions or recommendations based on the information in the report
  • How the information relates to other events or reports

Reports are closely related to essay writing , although there are some clear distinctions. While both rely on facts, essays add the personal opinions and arguments of the authors. Reports typically stick only to the facts, although they may include some of the author’s interpretation of these facts, most likely in the conclusion. 

Moreover, reports are heavily organized, commonly with tables of contents and copious headings and subheadings. This makes it easier for readers to scan reports for the information they’re looking for. Essays, on the other hand, are meant to be read start to finish, not browsed for specific insights. 

Types of reports

There are a few different types of reports, depending on the purpose and to whom you present your report. Here’s a quick list of the common types of reports:

  • Academic report: Tests a student’s comprehension of the subject matter, such as book reports, reports on historical events, and biographies 
  • Business reports: Identifies information useful in business strategy, such as marketing reports, internal memos, SWOT analysis, and feasibility reports
  • Scientific reports: Shares research findings, such as research papers and case studies, typically in science journals

Reports can be further divided into categories based on how they are written. For example, a report could be formal or informal, short or long, and internal or external. In business, a vertical report shares information with people on different levels of the hierarchy (i.e., people who work above you and below you), while a lateral report is for people on the author’s same level, but in different departments. 

There are as many types of reports as there are writing styles, but in this guide, we focus on academic reports, which tend to be formal and informational. 

>>Read More: What Is Academic Writing?

What is the structure of a report?

The structure of a report depends on the type of report and the requirements of the assignment. While reports can use their own unique structure, most follow this basic template:

  • Executive summary: Just like an abstract in an academic paper, an executive summary is a standalone section that summarizes the findings in your report so readers know what to expect. These are mostly for official reports and less so for school reports. 
  • Introduction: Setting up the body of the report, your introduction explains the overall topic that you’re about to discuss, with your thesis statement and any need-to-know background information before you get into your own findings. 
  • Body: The body of the report explains all your major discoveries, broken up into headings and subheadings. The body makes up the majority of the entire report; whereas the introduction and conclusion are just a few paragraphs each, the body can go on for pages. 
  • Conclusion: The conclusion is where you bring together all the information in your report and come to a definitive interpretation or judgment. This is usually where the author inputs their own personal opinions or inferences.  

If you’re familiar with how to write a research paper , you’ll notice that report writing follows the same introduction-body-conclusion structure, sometimes adding an executive summary. Reports usually have their own additional requirements as well, such as title pages and tables of content, which we explain in the next section. 

What should be included in a report?

There are no firm requirements for what’s included in a report. Every school, company, laboratory, task manager, and teacher can make their own format, depending on their unique needs. In general, though, be on the lookout for these particular requirements—they tend to crop up a lot: 

  • Title page: Official reports often use a title page to keep things organized; if a person has to read multiple reports, title pages make them easier to keep track of. 
  • Table of contents: Just like in books, the table of contents helps readers go directly to the section they’re interested in, allowing for faster browsing. 
  • Page numbering: A common courtesy if you’re writing a longer report, page numbering makes sure the pages are in order in the case of mix-ups or misprints.
  • Headings and subheadings: Reports are typically broken up into sections, divided by headings and subheadings, to facilitate browsing and scanning. 
  • Citations: If you’re citing information from another source, the citations guidelines tell you the recommended format.
  • Works cited page: A bibliography at the end of the report lists credits and the legal information for the other sources you got information from. 

As always, refer to the assignment for the specific guidelines on each of these. The people who read the report should tell you which style guides or formatting they require. 

How to write a report in 7 steps

Now let’s get into the specifics of how to write a report. Follow the seven steps on report writing below to take you from an idea to a completed paper. 

1 Choose a topic based on the assignment

Before you start writing, you need to pick the topic of your report. Often, the topic is assigned for you, as with most business reports, or predetermined by the nature of your work, as with scientific reports. If that’s the case, you can ignore this step and move on. 

If you’re in charge of choosing your own topic, as with a lot of academic reports, then this is one of the most important steps in the whole writing process. Try to pick a topic that fits these two criteria: 

  • There’s adequate information: Choose a topic that’s not too general but not too specific, with enough information to fill your report without padding, but not too much that you can’t cover everything. 
  • It’s something you’re interested in: Although this isn’t a strict requirement, it does help the quality of a report if you’re engaged by the subject matter. 

Of course, don’t forget the instructions of the assignment, including length, so keep those in the back of your head when deciding. 

2 Conduct research

With business and scientific reports, the research is usually your own or provided by the company—although there’s still plenty of digging for external sources in both. 

For academic papers, you’re largely on your own for research, unless you’re required to use class materials. That’s one of the reasons why choosing the right topic is so crucial; you won’t go far if the topic you picked doesn’t have enough available research. 

The key is to search only for reputable sources: official documents, other reports, research papers, case studies, books from respected authors, etc. Feel free to use research cited in other similar reports. You can often find a lot of information online through search engines, but a quick trip to the library can also help in a pinch. 

3 Write a thesis statement

Before you go any further, write a thesis statement to help you conceptualize the main theme of your report. Just like the topic sentence of a paragraph, the thesis statement summarizes the main point of your writing, in this case, the report. 

Once you’ve collected enough research, you should notice some trends and patterns in the information. If these patterns all infer or lead up to a bigger, overarching point, that’s your thesis statement. 

For example, if you were writing a report on the wages of fast-food employees, your thesis might be something like, “Although wages used to be commensurate with living expenses, after years of stagnation they are no longer adequate.” From there, the rest of your report will elaborate on that thesis, with ample evidence and supporting arguments. 

It’s good to include your thesis statement in both the executive summary and introduction of your report, but you still want to figure it out early so you know which direction to go when you work on your outline next. 

4 Prepare an outline

Writing an outline is recommended for all kinds of writing, but it’s especially useful for reports given their emphasis on organization. Because reports are often separated by headings and subheadings, a solid outline makes sure you stay on track while writing without missing anything. 

Really, you should start thinking about your outline during the research phase, when you start to notice patterns and trends. If you’re stuck, try making a list of all the key points, details, and evidence you want to mention. See if you can fit them into general and specific categories, which you can turn into headings and subheadings respectively. 

5 Write a rough draft

Actually writing the rough draft , or first draft, is usually the most time-consuming step. Here’s where you take all the information from your research and put it into words. To avoid getting overwhelmed, simply follow your outline step by step to make sure you don’t accidentally leave out anything. 

Don’t be afraid to make mistakes; that’s the number one rule for writing a rough draft. Expecting your first draft to be perfect adds a lot of pressure. Instead, write in a natural and relaxed way, and worry about the specific details like word choice and correcting mistakes later. That’s what the last two steps are for, anyway. 

6 Revise and edit your report

Once your rough draft is finished, it’s time to go back and start fixing the mistakes you ignored the first time around. (Before you dive right back in, though, it helps to sleep on it to start editing fresh, or at least take a small break to unwind from writing the rough draft.) 

We recommend first rereading your report for any major issues, such as cutting or moving around entire sentences and paragraphs. Sometimes you’ll find your data doesn’t line up, or that you misinterpreted a key piece of evidence. This is the right time to fix the “big picture” mistakes and rewrite any longer sections as needed. 

If you’re unfamiliar with what to look for when editing, you can read our previous guide with some more advanced self-editing tips . 

7 Proofread and check for mistakes

Last, it pays to go over your report one final time, just to optimize your wording and check for grammatical or spelling mistakes. In the previous step you checked for “big picture” mistakes, but here you’re looking for specific, even nitpicky problems. 

A writing assistant like Grammarly flags those issues for you. Grammarly’s free version points out any spelling and grammatical mistakes while you write, with suggestions to improve your writing that you can apply with just one click. The Premium version offers even more advanced features, such as tone adjustments and word choice recommendations for taking your writing to the next level. 

how to write a financial report pdf

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Readout of President Joe   Biden’s Meeting with President Xi Jinping of the People’s Republic of   China

President Joseph R. Biden, Jr. today held a Summit with President Xi Jinping of the People’s Republic of China (PRC), in Woodside, California.  The two leaders held a candid and constructive discussion on a range of bilateral and global issues including areas of potential cooperation and exchanged views on areas of difference. 

President Biden emphasized that the United States and China are in competition, noting that the United States would continue to invest in the sources of American strength at home and align with allies and partners around the world.  He stressed that the United States would always stand up for its interests, its values, and its allies and partners.  He reiterated that the world expects the United States and China to manage competition responsibly to prevent it from veering into conflict, confrontation, or a new Cold War.

The two leaders made progress on a number of key issues. They welcomed the resumption of bilateral cooperation to combat global illicit drug manufacturing and trafficking, including synthetic drugs like fentanyl, and establishment of a working group for ongoing communication and law enforcement coordination on counternarcotics issues. President Biden stressed that this new step will advance the U.S. whole-of-government effort to counter the evolving threat of illicit synthetic drugs and to reduce the diversion of precursor chemicals and pill presses to drug cartels.

The two leaders welcomed the resumption of high-level military-to-military communication, as well as the U.S.-China Defense Policy Coordination Talks and the U.S.-China Military Maritime Consultative Agreement meetings.  Both sides are also resuming telephone conversations between theater commanders.

The leaders affirmed the need to address the risks of advanced AI systems and improve AI safety through U.S.-China government talks.

The two leaders exchanged views on key regional and global challenges.  President Biden underscored the United States’ support for a free and open Indo-Pacific that is connected, prosperous, secure, and resilient.  The President reaffirmed the United States’ ironclad commitment to defending our Indo-Pacific allies.  The President emphasized the United States’ enduring commitment to freedom of navigation and overflight, adherence to international law, maintaining peace and stability in the South China Sea and East China Sea, and the complete denuclearization of the Korean Peninsula .

President Biden reaffirmed that the United States, alongside allies and partners, will continue to support Ukraine’s defense against Russian aggression, to ensure Ukraine emerges from this war as a democratic, independent, sovereign, and prosperous nation that can deter and defend itself against future aggression.  Regarding the Israel-Hamas conflict, the President reiterated U.S. support for Israel’s right to defend itself against terrorism and emphasized the importance of all countries using their influence to prevent escalation and expansion of the conflict.

President Biden underscored the universality of human rights and the responsibility of all nations to respect their international human rights commitments. He raised concerns regarding PRC human rights abuses, including in Xinjiang, Tibet, and Hong Kong.  On Taiwan, President Biden emphasized that our one China policy has not changed and has been consistent across decades and administrations.  He reiterated that the United States opposes any unilateral changes to the status quo from either side, that we expect cross-strait differences to be resolved by peaceful means, and that the world has an interest in peace and stability in the Taiwan Strait.  He called for restraint in the PRC’s use of military activity in and around the Taiwan Strait.  President Biden also raised continued concerns about the PRC’s unfair trade policies, non-market economic practices, and punitive actions against U.S. firms, which harm American workers and families.  The President emphasized that the United States will continue to take necessary actions to prevent advanced U.S. technologies from being used to undermine our own national security, without unduly limiting trade and investment. 

The President again emphasized that it remains a priority to resolve the cases of American citizens who are wrongfully detained or subject to exit bans in China.  

The two leaders reiterated the importance of ties between the people of the United States and the People’s Republic of China, and committed to work towards a significant further increase in scheduled passenger flights early next year, in parallel with actions to restore full implementation of the U.S.-China air transportation agreement, to support exchanges between the two countries. The two leaders also encouraged the expansion of educational, student, youth, cultural, sports, and business exchanges.

The two leaders underscored the importance of working together to accelerate efforts to tackle the climate crisis in this critical decade.  They welcomed recent positive discussions between their respective special envoys for climate, including on national actions to reduce emissions in the 2020s, on common approaches toward a successful COP 28, and on operationalizing the Working Group on Enhancing Climate Action in the 2020s to accelerate concrete climate actions. President Biden stated that the United States stands ready to work together with the PRC to address transnational challenges, such as health security and debt and climate finance in developing countries and emerging markets.

Building on the November 2022 meeting in Bali where they discussed the development of principles related to U.S. – China relations, the two leaders acknowledged the efforts of their respective teams to explore best practices for the relationship.  They stressed the importance of responsibly managing competitive aspects of the relationship, preventing conflict, maintaining open lines of communication, cooperating on areas of shared interest, upholding the UN Charter, and all countries treating each other with respect and finding a way to live alongside each other peacefully. The leaders welcomed continued discussions in this regard.

The two leaders agreed that their teams will follow-up on their discussions in San Francisco with continued high-level diplomacy and interactions, including visits in both directions and ongoing working-level consultations in key areas, including on commercial, economic, financial, Asia-Pacific, arms control and nonproliferation, maritime, export control enforcement, policy-planning, agriculture, and disability issues.

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  5. FREE 20+ Sample Financial Report Templates in PDF

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  6. Annual Business Report Examples

    how to write a financial report pdf


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    Ideally, readers should be able to scan through the document and get the relevant information they need. Here are some pointers for a good annual report design: Use headings and subheadings. Devote space to photographs, infographics, and other compelling visual elements. Keep the text short and simple.

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