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Users of informationGrade 11.pptxABM1_Concepts and Principles.pptx

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The key users of financial statements include owners/stakeholders, managers, employees, investors, creditors, customers, suppliers, government, the public, and academe. Owners/stakeholders, managers, and employees use the statements to evaluate the performance and financial position of the business. Investors, creditors, customers, and suppliers use them to assess the creditworthiness and stability of the business. The government uses them to ensure businesses are paying taxes properly and regulating the economy. The public and academe use them for employment prospects and academic purposes respectively.

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Users of informationGrade 11.pptxABM1_Concepts and Principles.pptx
1. Statement of Financial Position 2. Income Statement 3. Statement of Changes in Equity 4. Statement of Cash Flows 5. Notes, comprising of a summary of significant accounting policies and other explanatory information
Who are the users of these information?
Users of informationGrade 11.pptxABM1_Concepts and Principles.pptx
Users of informationGrade 11.pptxABM1_Concepts and Principles.pptx
Users of informationGrade 11.pptxABM1_Concepts and Principles.pptx
OWNER/STAKEHOLD ERS MANAGER EMPLOYEES
They provide capital to the business. They need accounting information to check if the business is well. Accounting information also helps them in deciding whether to withdraw or increase their investments. Overall, they are interested to know if the business is profiting and how much. OWNER/STAKEHOLDE RS
OWNER/STAKEHOLD ERS MANAGER EMPLOYEES
They are people employed by the company to perform management functions such as planning, organizing and running the business affairs. MANAGER
OWNER/STAKEHOLD ERS MANAGER EMPLOYEES
They are ordinary company employees who assess the company¡¯s profitability and stability, and their consequence on future salary and job security. EMPLOYEES
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME
They are individuals or other business planning to invest in the company. To be able to make sure that the company is worth putting their money in, they check its financial statements and make decisions based on the accounting information gathered. INVESTORS
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
They are individuals, institutions or banks who have lent or are planning to lend money to the company. They need to check the company¡¯s financial statements in order to assess its credit worthiness and the capability of the business to pay its obligations including related interests on maturity date. CREDITORS
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
Banks and Other Lenders Lenders would like to know if a business is capable of paying debts. Lenders often asses the stability of the business as well as cash flows and profitability. They are particularly interested in the ability of a business to pay borrowings and the corresponding interests when they become due.
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
They refer to people who buy goods or acquire services from the company at a price. They check the financial statements of their suppliers in order to determine if they are a stable source of supply over a long period. CUSTOMERS
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
They are businesses that provide supplies to other businesses. They check the financial statements of their customers in order to determine if debts owed to them will be paid when due. SUPPLIERS
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
The government is concerned about regulating businesses and their effects to the economy. They also want to check if businesses are paying their taxes honestly. Thus, they check the financial statements of businesses. Examples are the Bureau of Internal Revenue, which is a tax authority, and the Securities and Exchange Commission which is a regulatory body. GOVERNMENT
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
The general public is composed to individuals who are not related to the company. However, they use the financial statements of a company to determine how it affects the economy, and pinpoint possible prospects for employment. PUBLIC
INVESTORS CREDITORS CUSTOMER S SUPPLIERS GOVERNMEN T PUBLIC ACADEME Banks and Other Lenders
Educational institutions use accounting information from the financial statement of a company for academic purposes. ACADEME
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Users of informationGrade 11.pptxABM1_Concepts and Principles.pptx

Editor's Notes

  • #15: Investors Potential investors are interested in the past performance of a business and its potential for future earnings. The financial statement of a company summarizes historical information on performance, financial position, and business activities. These sets of information are vital in assessing profitable investments. Current investors also want to track the performance of their investments to be able to decide whether to hold on to such investment or look for more promising ones.
  • #17: Trade Creditors or Suppliers Some suppliers of businesses provide goods and services on credit. Before extending credit, trade creditors review the ability of a business to pay. Creditors are particularly interested in a company's liquidity (i.e., ability to pay short term obligations). Cash flows and profitability is also assessed. Information gathered may also be used in determining the extent of credit to be allowed, credit period, and other credit policies to be applied.