1. Reflect the financial status of the enterprise: By reflecting the assets, liabilities and shareholders' equity of the enterprise, we can know whether the current financial status of the enterprise is healthy and stable and whether it has solvency.
2. Provide reference for enterprise management: enterprise managers can master the long-term and short-term debt structure of enterprises according to the balance sheet, make corresponding capital strategy adjustments, solve the liquidity problem, optimize the financial structure of enterprises, and better operate enterprises.
3. Improve investor confidence: Enterprises must rely on credibility both internally and externally, and the balance sheet directly affects investors' confidence in the future operation of enterprises. Enterprises show risks and benefits to investors in this form, which makes investors' requirements for enterprises more real and transparent and enhances investors' confidence in enterprises.
4. Provide support for enterprise financing: When enterprises apply for bank loans or attract new shareholders, the balance sheet also plays an important role. Banks and potential shareholders usually make a detailed assessment of the assets and liabilities of enterprises. The balance sheet provides the operating status and liabilities of the enterprise and judges the financing situation of the enterprise.
The difference between balance sheet and cash flow statement;
1. Conceptual difference: the balance sheet is the static disclosure of the enterprise at the time node, reflecting the assets, liabilities and shareholders' equity of the enterprise at that time; The cash flow statement is based on cash receipts and payments, which reflects the cash receipts and payments of enterprises in a certain period and their changes.
2. Differences in the impact on enterprises: The balance sheet mainly reflects the financial status of enterprises, not directly reflects the operating status of enterprises, and gives stakeholders a static reference framework to understand the survival and solvency of enterprises. The cash flow statement can fully show the liquidity of the enterprise and reflect the real operating status and financial health of the enterprise.
3. Differences in business decisions: The balance sheet cannot reflect the overall business situation and long-term development plan of the enterprise, so enterprises seldom refer to the balance sheet in long-term decision-making, and more use the information of the cash flow statement.
For enterprise managers, it is necessary to maintain the cash needed for the company's operation according to the cash flow statement, so as to improve the company's solvency and ensure that a large amount of budget funds are used for the company's supplementary circulation.