What Every Executive Needs to Know About Financial Reports | CFO.University (2024)

FAQs

What reports does a CFO need? ›

This includes the income statement, balance sheet, and cash flow statement. What are some common financial metrics used by CFOs? Common financial metrics used by CFOs include revenue growth, profit margins, return on investment (ROI), cash flow, and debt-to-equity ratio.

The CFO uses financial statements to assess the current and future sustainability of the organization. These reports give them access to information about the short-term and long-term health of the company. This helps them identify trends in financial performance over time.

If you have no previous financial background, you absolutely must begin by gaining an understanding of the very basics. At the very least, you should be able to: understand your balance sheet, income statement and cash flow statement. know your net profit margin.

But if you're looking for investors for your business, or want to apply for credit, you'll find that four types of financial statements—the balance sheet, the income statement, the cash flow statement, and the statement of owner's equity—can be crucial in helping you meet your financing goals.

Key Components of a CFO Report

Executive Summary: A high-level overview of the company's financial performance and key findings. Income Statement: A summary of revenue, expenses, and net income. Balance Sheet: A snapshot of the company's assets, liabilities, and shareholders' equity.

Deloitte is one of many organizations to have distilled the role of the CFO down to four main categories: Operator, Steward, Catalyst and Strategist.

The role of a CFO is similar to a treasurer or controller because they are responsible for managing the finance and accounting divisions and for ensuring that the company's financial reports are accurate and completed in a timely manner.

Of course, trust is typically earned, not given. They should demonstrate trustworthy behavior—actively listening, adhering to commitments, and taking responsibility. More than any other relationship in the organization, ongoing trust between the CEO and CFO is essential.

What does a CFO want to see? ›

CFOs should form an independent, fact-based view of the resources, support structures, and activities that the organization has in place to create value—as well as which ones actually do create value. Then they should make sure all C-suite colleagues, business unit leaders, and the board of directors are aligned.

Keep your comments honest and objective: CEOs want a trusted adviser who can be relied on for candid, impartial advice. Numerous CEOs cited the need for their CFOs to have uncompromising ethics and the ability to “tell the hard truths.”

The income statement, balance sheet, and statement of cash flows are required financial statements. These three statements are informative tools that traders can use to analyze a company's financial strength and provide a quick picture of a company's financial health and underlying value.

Types of Financial Statements: Income Statement. Typically considered the most important of the financial statements, an income statement shows how much money a company made and spent over a specific period of time.

The financial controller is generally in charge of the accounting function in an organization and reports to the CFO.

Typically, the CFO is the highest-ranking finance team member in the company. In a traditional company hierarchy, they are usually third in line, behind the CEO and COO. The CFO reports directly to the CEO. Both are leaders of the finance team.

What Degree Do You Need to Become a CFO? To become a CFO, you need a degree in a field like accounting, or something related to finance/accounting. Some people get a degree in business and then an MBA, but it is recommended to get education and experience in accounting/finance.

CFOs traditionally report directly to the CEOs. However, depending on organizational structures or other circ*mstances within a company, they may also report indirectly through other channels, such as the Board of Directors or other executives within.