The financial problems faced by these companies, if allowed may result in protracted bankruptcy. Some companies are experiencing financial problems trying to solve this problem by making loans and the merger, or otherwise there is a cover of business. Bankruptcy of a company can be seen and measured through financial reports. Financial Statements issued by the company is one source of information about the company’s financial position, performance and changes in financial position, which is very useful to support decision-making, financial data must be converted into information useful in making economic decisions.
The financial statements and disclosure is made firm with the aim of providing useful information for investment decision making and funding. The financial statements should provide information:
1st. for investment and credit decisions,
2. regarding the amount and timing of cash flows,
3. related assets and liabilities,
4. about company performance,
5. about the sources and uses of cash,
6. descriptive and interpretive, and
7. to assess stewardship.
This goal is summarized by the Seventh presented the income statement, balance sheet, cash flow statements and financial statement disclosures. One important aspect of analysis on the financial statements of a company is useful to predict continuity or
survival of the company. Prediction of survival is very important to the management company and owner of the company to anticipate the possibility of a potential bankruptcy.
