Financial statements tell a story about the business, is it profitable or not, what assets does it have, what obligations does it have, how much have the owners contributed, what is the book value of the business etc. All transactions/economic events are aggregated/summarised and presented in a manner that is easily comprehendible and interpreted by the users of financial statements (shareholders, funders, SARS etc).
Funders require financial statements to determine whether a business is likely to pay them or not. They look at profitability, ability to generate cash flow and level of debt.
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