Managers and Directors of Government Business Enterprises
Whether your Government Business Enterprise (GBE) has profits or surpluses and losses or deficits, its Financial Statements provide you with important information in meeting your financial commitments to your equity holder.
Just like any other business, meeting financial targets is expected so you need to understand how your profit margins are trending, whether your capital is being managed well and while the government may not allow your GBE to become insolvent, if it needs a bail out your job and reputation could be at stake so managing cash flow is important too. And if the government expects a dividend, being able to read, analyse and use the Financial Statements is even more important.
The circumstances in which the GBE operates may be different from those of businesses in the private sector but its Income Statement (Profit & Loss Account), Balance Sheet and Cash Flow Statement are just as important. They are crucial inputs to decision making so being able to read, analyse and use them are must-haves for managers and directors of GBEs.