Kotak Mahindra Bank Limited Annual Report AnalysisFinancial statements provide an overview of a company's financial condition in both the short and long term. They help in understanding the past performance of the company and making future predictions about the company. It therefore helps us look beyond the profit figures. There are 3 basic financial statements. They are:-Income StatementFinancial Statement and Cash Flow StatementPurpose of the financial statement"The objective of the financial statement is to provide information about the financial position, performance and changes in the financial position of a business that is useful to a wide range of users in make economic decisions."[Financial statements should be understandable, relevant, reliable and comparable. Reported assets, liabilities, and net worth are directly related to an organization's financial position. Reported revenues and expenses are directly related to an organization's financial performance. Financial statements must be understandable by readers who have "a reasonable knowledge of business and economic activities and accounting and who are willing to study the information diligently." Owners and managers require financial statements to make important business decisions that affect its ongoing operations. Financial analysis is then performed on these statements to provide management with a more detailed understanding of the numbers. These statements are also used as part of management's annual report to shareholders. Employees also need these relationships to enter into collective bargaining agreements (CBAs) with management, in the case of unions or for individuals when discussing their pay, promotion and rankings. 2. External users: These are potential investors, banks, government agencies and other parties who are external to the company but who need financial information about the company for a variety of different reasons. Potential investors use financial statements to evaluate the feasibility of investing in a company. Financial analysis is often used by investors and is prepared by professionals (financial analysts), thus providing them with the basis for making investment decisions. Financial institutions (banks and other credit companies) use them to decide whether to give a business new working capital or extend debt securities (such as a long-term bank loan or bonds) to finance expansion and other significant expenses. Government bodies (tax authorities) need financial statements to ascertain the correctness and accuracy of taxes and other duties declared and paid by a company. The media and the general public are also interested in financial statements for a variety of reasons. To attract new investors, most companies assemble their financial statements on fine paper with attractive graphics and photos into an annual shareholder report, attempting to capture the excitement and culture of the organization in a sort of "marketing brochure"..