USERS OF FINANCIAL STATEMENT.pptx

presentation content on users of financial statement.

1. USERS OF FINANCIAL STATEMENT INTERNAL .OWNERS .MANAGERS .EMPLOYES AND WORKERS EX TERNAL .BANKS AND FINANCIAL INSTITUTIONS .CREDITORS .GOVERNEMENT AND ITS AUTHORITIES .RESEARCHERS .PRODUCT PRICING .PUBLIC

2. 1.INTERNAL USERS ( i ) Owners : Owners can use the statements to evaluate whether their investment is safe and whether the company is providing an acceptance return on their money. (ii) Managers : Managers are the primary users of Financial statements because they have to make decisions whether to add debt or how to maintain cash flow. For example investment into new projects , cost controls and reduction etc . (iii) Employees and workers : Employees and Workers are entitled to bonus at the year end, which is linked to the profit earned by the company. Therefore, the employees and workers are interested in Financial Statements.

3. 2. EXTERNAL USERS ( i ) Bankers : The Banker is interested to see that the loan amount is secure and the customer is also able to pay the interest regularly. It is through the Financial statements that a banker can keep a watch on the business plans and performances of its customers. (ii) Government : The Financial Statements are used to assess tax liability of business enterprises . The Government studies economic situation of the country from these statements . These statements also enables the government to find out whether business is following rules and regulations or not. (iii) Researchers : The information in financial statements helps researchers in studies or surveys related with a particular firm or industry.

4. (iv) Investors: The investors include both long- term and short- term investors. They will not only analyse the present financial position but will also study future prospects and expansion plans of the concern. (v) Creditors : If you owe money or you’re slow paying your bills , your creditors may want to double-check your statement. (vi) Public: They want to see the business running since it makes substantial contribution to the economy in many ways, e.g., employment of people etc. Thus this statement provides useful information to various user groups for decision-making.