understanding financial jargon
A company that is registered as an independent trading entity is required to produce a full set of financial trading records each year. These records are called the Company Accounts, and are legally required to be lodged with the government organisations which record the existence and status of companies (Companies House in the UK), and the tax authorities (HMRC in the UK).
The company accounts usually contain three main sections called the Balance Sheet, the Profit and Loss Statement (or Income Statement), and the Cash Flow Statement. There will often be other ancillary sections dealing with items such as director remuneration, notes to accounts and so on.
Investors and other interested parties can obtain copies of any company accounts which have been lodged with the appropriate authorities, from a variety of sources including the authorities themselves, the company, or through third parties. The information contained within the company accounts can help to identify if a company is in good or bad financial health.
What to do if you need more help
If you need more help with your specific commercial loan, mortgage or insurance requirement please speak to a professional financial adviser.
We hope you found this information useful.
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