Who uses financial statements? Why they want to know the financial statements of a business?
(Hindi lang pala sa atin may users, accounting din pala hahaha jk)
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Users of Financial Statements
Internal Users - those who make decisions
1. Managers - those who plan, organize and run the business.
2. Owners - provide the capital of the business.
External Users - who make their decisions
1. Investors - to know if the company has the ability to pay dividends for them to determine whether they will buy, hold or sell their investments.
2. Employees - to know if the company has the ability to pay salaries and give benefits.
3. Lenders - to know if the company has the ability to pay debts on time.
4. Suppliers - just like the lenders, they want to know if the company has the ability to pay debts and if the company is loyal to them.
5. Customers - to know if the company has the ability to exist over a long period of time and to be a continuing source of supply.
6. Government Agencies - to know if the company has the ability to pay tax.
7. Public - to know if the company has contribution to the economy.
8. Management - to determine the activities of the company.
9. Creditors - to assess credit worthiness.
10. Government and Regulatory Bodies - to ensures if the company is in accordance with the rules and regulations.
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Frias, S. ABM
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Accounting
RandomThis book is filled with accounting lessons specially crafted for accounting students and aspiring accountants. Dive into the world of numbers and financial know-how as I guide you through essential concepts and practical insights. Whether you're ju...
