For today’s globalized businesses, the financial information is an essence of capital markets & it is most critical when it comes to representation of your financial data. There are millions of cross border transactions happening every day and moment as part of business practice and routine.
The investors across the globe needs the access of the trust worthy and reliable financial information. IFRS provides a unique language to account and represent your financial data in most unified formats through the statements those are transparent, reliable, relevant and efficient for internal and external business users.
There are multiple standards followed across geographies to generate financial statements and referred as local GAAP (Generally accepted accounting principles). The biggest challenge is how your investor from different geographies going to analyse the same.
Here are key things that investors typically look from the financial statements.
- There are four most important metrics any investors would look for
- What is beyond numbers in comprehensive income statement, statement of financial position (balance sheet) & cash flows
- Current Ratio: Liquidity in terms cash to cover the current and next financial year operations
- Valuation and analysis of working capital
- Comparison based on revenue and net earnings growth every year
- A yearly comparative analysis on Return on assets, return on capitals and equity
- Comparative analysis of Operating cash flows