To ensure that the funds are properly utilized, companies must keep proper records of all their financial transactions. The annual profit or loss of the company is audited by a chartered accountant. The audited statement is an integral part of the company’s annual report.

One has to know that other than financial statements that are prepared annually, they are also done monthly, quarterly and half-yearly to enable the management to have total control over the operations and have up-to-date information on the financial status of the company.

While the official audited annual statements are the most important ones, the quarterly and half-yearly statements provide a gist of the performance of the company during the last quarter or half-year.

The analysts use these figures to conclude whether the performance of the company has gone up as per expectation. They also use these figures to make an educated guess about the future performance of the company.

Quarterly statements also make it possible to compare the performance between each quarter. These comparisons could reveal some relevant aspects of the business of the company- a business having a seasonal nature for example. The ability of a company to achieve the expected target every quarter affects the market price of its shares. To give an example – a jump in its share price can be seen when the quarterly result of the company exceeds the expectations of the investor.

As a matter of caution, one should keep in mind that despite having a promising future outlook based quarterly and half-yearly results, the prediction of the experts could go wrong. Because of the uncertainty in any business, there is always a possibility of the company facing difficult situations.