Financial statements-uses & users
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Discuss how different users utlize the financial statements. Be specific when you answer this, for example - who uses what statement in what fashion- what are they looking for etc.
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Solution Summary
The answer explains the meaning ans uses of each financial statement and also the users of the financial statements.
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Dear student,
Discuss how different users utlize the financial statements. Be specific when you answer this, for example - who uses what statement in what fashion- what are they looking for etc.
Financial statements consist of profit and loss account, Balance sheet and the cash flow statement. Profit and loss account depicts the operating efficiency of the company and it shows whether the company has earned profit or loss during the particular financial year. Balance sheet shows the financial position of the company on the particular date i.e., usually at the end of the financial year. Cash flow statement shows the cash flow from operation and the inflow and outflow of cash and shows the solvent position of the company.
Users of financial statement:
1. Shareholders and prospective investors: Shareholders of the company use the financial statements of the Company. ...
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