Financial reporting is the process of disclosing an organization's financial health to investors, managers, and governmental agencies through a variety of formats and forums including financial statements, press releases, annual reports, prospectuses, and corporate websites.
Financial reporting is a legal requirement for all publicly traded companies in the United States, and enforced by the Securities and Exchange Commission (SEC).
The most common financial reports are the Income Statement, Balance Sheet, and Cash Flow Statement. These reports must adhere to reporting standards defined by the Financial Accounting Standards Board (FASB) that use rules known as Generally Accepted Accounting Principles (GAAP). GAAP rules ensure financial reporting consistency and objectivity for stakeholder decision-making and benchmarking purposes.
Learn why understanding these reports is important to all leaders - not just the CFO:
The Income Statement, also known as the Profit and Loss Statement, is one of three important financial analysis tools that are used to better understand and manage the financial health of a business.
The Income Statement shows revenues, expenses, and profits for a period of time such as a month, quarter, or year.
Simply put, it is a way to measure whether a company’s products and services are profitable by subtracting all its business costs and expenses from its total revenue during a specific period, which results in net profit.
Learn more about the meaning of some important terms on the Income Statement:
New leaders often step into their new roles having received little training, navigating unfamiliar territories under additional pressure, while attempting to lead their former peers. At Insight Experience we believe that in order to be successful, new leaders must possess the skills to:Lead strategically by understanding the organization’s strategy and making connections to how their team fits into that larger strategy picture.
Learn more about essential skill development for new leaders:
What you achieve as a leader comes down to how well you inspire, direct and empower your team. Strategic Communication can come in any form, and must clearly convey your plan of action across 4 dimensions:
Strategic Alignment: Is the content of your message clearly connected to the strategy? Do you explain to your team where the company is headed, how what you are asking them to do connects to the organization as a whole, and how it supports the strategy?
Consistency: Is your message consistent with your business goals and objectives? Is it consistent over time? Is it in line with what other stakeholders are being told?
Tone: Is your team motivated by what you are saying? What is the tone of the message? Are you recognizing their efforts? Is your message engaging?
Accountability: What do you expect of your team? Is it clear what your team’s goals are and what you want them to do? Your message should include an explanation about how they will be held accountable for the results.
Strategy is a long term plan for how to attain objectives. In business, a growth strategy may be to strengthen core products or acquire relevant assets.
FOR EXAMPLE: Company A has a 2020 goal of 11% revenue and 13% EBIDTA. This is their business Objective. They have decided to reach that goal by focusing on growth in new markets, which they will achieve through investing in innovation and acquiring smaller businesses in their field. That is their strategy.