Question

concepts of decision making through the analysis of the Theory of Analysis of Financial Statements.

Answer 1

The financoal statements are very important docyment of a company. It consists of;

- Balance sheet

- Income statement

- Cash flow statement

- Statement of changes in equity

- Other - It can be appendices, notes, etc.

An analysis of financial statement is very important before any decisions can be made. It is importnat for both internal and external stakeholders. Internal stakeholders uses in making the several decisions such as financing, dividends,etc. It can provode an insight of the organisation. The management uses it in controlling the operations.The external stakeholders such as shareholders and the creditors uses it to decide whether to continue the investment or not. So, it is very essential for all stakeholders.