Users Of Financial Statement | Future Investor of the Business

Users Of Financial Statement | Future Investor of the Business

Do you know why the Financial Statement is important for their users?

 

The financial statement is a statement which reflects the company’s overview and also important for business owners investor and many other people who are involved in the financial reports. The statement made in the period in monthly quarterly and yearly basis.

The goal of the state accounts is to provide information to users of financial statements for sound decision-making. But there is the question actually who is the users of the financial statement? And what types of information they need?

The users who use financial statement information are the investor of the firm, management of the company, suppliers, lenders, business stuff, consumers, government agencies, the general public, labor union and the competitor of the company.

Owner and the future investor:

Stakeholders of the company need financial information to make their decision whether they run the corporation or not that means what they do their investment? Hold their share, sell or more buy.

The expected investors want information to evaluate the company’s possibility for success and probability. On the other hand, the small business owners try to know the position of the business whether he will investor he will quit.

Management of the company:

In the small business, the owner is the business is height authority of the management of his own business. In the Big organization, management made up to hire higher professionals who are responsible and trusted to operate the business. They are likely as an agent of the owners.

The management whether they are owners or hired? They are raising some questions-

  • How much cash on hand after the end of the financial year?
  • supplies on hand at the end of the year
  • Can we achieve the possible target?
  • The user of financial statement analysis.

All those questions and many other questions are required to User of financial statement and their needs for decision-making.

Lenders:

The lender who is given the loan to operate company’s normal activities such as a bank, financial institutions those wants to know the ability to pay liabilities.

Supplier:

Suppliers are also interested to know the companies lend payment ability because of supplier’s transactions with the company on due. so that reason suppliers as like the lender he wants to know the ability of company repayment in short time.

Users of financial statement analysis

Government agencies:

The agency that is the responsibility to support the work of the government as the governing bodies of the state, especially the tax and customs authorities who are the interested in an entity’s financial information for taxation and regulatory purposes and the customs are interested to know how much the company pays their export and import duties. On the other hand, tax bodies interested to know how much the taxpayers make to determine the tax.

Company’s Stuff:

Company’s stuff which means company’s employee those are interested about company’s stability and profitability. The ability to pay the company to pay salaries of the employees and the other benefits and also interested to company’s financial position and performance for expansion possibility of the company and the career development.

Consumer:

When the consumer involvement and interest between the company and the costumes in long-term. The consumer is more interested in the existence and the stability of the company to its operation. The consumer needed to this is also peck in fact where the consumer depends on the corporations. In this case, a dealer and the customer is highly involved in the manufacturing company.

General public:

In this case, anyone who is the outside of the company such as researcher, analyzer, students, reseller who have an interest in the know for the company’s position, they also look at the financial statement for their interest.

Labor union:

In the government agency, labor trade union is mandatory by the rules of laws. Now a day, the trade union is reform in EPZ sectors also. The union must see labor facilities to benefits of salaries and the other benefits such as overtime, Tiffin cost etc. in this circumstance they want to financial position for their interest.

Competitor Of the Company:

Company’s competitors mean those who are the same product in the marketplace and same targeted customer in the market. They always want to overlap each other by their strategy that’s why the competitor looks each other financial statements closely. The user of Financial statement Internal and External those are the also interest for the statements.

The internal users are the managers of the company who operate the financial reports and take the decision from the information.

On the other hand, external users are who are not involved in company’s operations but still they have an interest such as investor, customer, dealer, and the direct interest is government agencies, trade union, and employees also.

 

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