Question

When considering companies’ financial statements, we often think of investors and analysts using the information contained in those statements to assess whether or not to invest in the companies. However, financial statements are not just for investors. Please explain who else should be concerned with a company’s financial statements and why they are important.

As portfolio activities are to be self-reflective, please make sure to connect the portfolio assignment to:

• Your personal experiences. Reflect on how this assignment topic is applicable to and will benefit you.
• Course readings and any external readings.
• Discussion forum posts or course objectives.

The Portfolio Activity entry should be a minimum of 500 words and not more than 750 words. Use APA citations and references if you use ideas from the readings or other sources.

Answer 1

Yes. financial statements are not just only for Investors whether to invest ot not to Invest in company.

Financial statements are important to

• Company Management - The management team needs to understand the profitability, liquidity, and cash flows of the organization every month, so that it can make operational and financing decisions about the business.

• Competitors - . Entities competing against a business will attempt to gain access to its financial statements, in order to evaluate its financial condition. The knowledge they gain could alter their competitive strategies.

• customer - . When a customer is considering which supplier to select for a major contract, it wants to review their financial statements first, in order to judge the financial ability of a supplier to remain in business long enough to provide the goods or services mandated in the contract.

• . Employees - A company may elect to provide its financial statements to employees, along with a detailed explanation of what the documents contain. This can be used to increase the level of employee involvement in and understanding of the business.

• Government.- A government in whose jurisdiction a company is located will request financial statements in order to determine whether the business paid the appropriate amount of taxes.