APT Initiatives
APT Business & Economics Resources
Minimising Workloads, Maximising Performance
Established in 1999

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Company Accounts

Generally consist of an income statement (or profit and loss account), a balance sheet, a director’s report and any notes to the accounts, and some have to include a special auditor’s report to the registrar at Companies House. Balance sheets and income statements (or profit and loss accounts) are two of the most important business documents. Both these documents are produced to help decision making and are essentially used, not only by management to assess the financial performance of the business, but potential lenders and investors to assess the business’s stability and ability to repay monies borrowed, and likely return on investment. Potential investors / shareholders and lenders, eg banks and building societies, would examine a business’s balance sheet and income statement before making a decision to invest or lend a business money. See accounts, income statement (profit and loss account) and balance sheet. The legal requirement to submit accounts varies according to type of business. For example, a PLC (public limited company) has to disclose a lot more information than other types of business, including a cash flow statement, and are legally obliged to publish their accounts and make them readily available for members of the general public to view, mainly due to the fact that shares in the business are openly traded on the stock exchange. In contrast, whilst private limited companies are not legally obliged to personally make their accounts readily available to anyone who might be interested, as with plc’s they are legally obliged to submit their accounts to the registrar at Companies House, and these accounts can be obtained / reviewed online for a small fee. The legal requirement to submit accounts also varies according to size of business. For instance, small and medium sized private limited companies (SME’s) can submit abbreviated rather than the full versions of the company accounts to the registrar.

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