Financial Reporting
Financial reports mirror aspects of corporate financial situation. Business activities and the shareholders (stockholders) are profit oriented i.e. they are interested in bottom lines (profit and loss). There are three Financial reports:

1. The Balance Sheet
This report shows what the company owns and owes i.e. its assets and liabilities.

2. The Profit and Loss account (P&L Account)
This report shows company’s financial performance (operating profit or loss).

3. Cash Flow
This report shows the outflow and inflow of money i.e. the cash flow gap. Due to overtrading companies can suffer or even go bankrupt if the inflow of money is not in balance with outflow. Early settlement discount is a way of overcoming this gap.