Explore BrainMass
Share

Explore BrainMass

    Objectives of the financial Statements

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A) Explain The Objectives of the financial Statements and state who are the interested parties of these statements
    B) what are the purposes for using performance indicators in a business context?
    C) state two ratios measuring Profitability, Working capital, and investors interest respectivlly.

    © BrainMass Inc. brainmass.com October 9, 2019, 5:40 pm ad1c9bdddf
    https://brainmass.com/business/financial-ratios/objectives-of-the-financial-statements-63943

    Solution Preview

    A) Explain The Objectives of the financial Statements and state who are the interested parties of these statements
    Accounting is the means by which information about an enterprise is communicated and, thus, is sometimes called the language of business. Costs, prices, sales volume, profits, and return on investment are all accounting measurements.
    Financial Statements is designed primarily to assist investors and creditors in deciding where to place their scarce investment resources. It is also used to help management to know the performance of organization.
    Financial statements are useful tools for evaluating both profitability and liquidity. Used separately, or in combination, the income statement and balance sheet help interested parties to measure a company's current financial performance, and to forecast its profit and cash flow potential.

    Many different users have need for accounting information in order to make important decisions. These users include investors, creditors, management, governmental agencies, labor unions, and others. Because the primary role of accounting information is to provide useful information for decision-making purposes, it is sometimes referred to as a means to an end, with the end being the decision that is helped by the availability of accounting information. Investors and other stakeholders in the firm need regular financial information to help them monitor the firm's progress. Accountants summarize this information in a balance sheet, income statement, and statement of cash flows. The statement of cash flows provides information about cash receipts and cash payments of an entity during a period. ...

    Solution Summary

    This posting explains the objectives of the financial statements

    $2.19