Question

Who are some of the basic uses of financial statements, and how do they use them?

Answer 1

some of the basic uses of financial statements :-

Lenders - They will use the financial statement to know the financial stability to pay off borrowed funds to creditors along with interests

Investors - Potential investors will see the past performace of a company by seeing financial statements of preceeding years to make a decision whether to invest or not into the company

Competitors - By using financial statement, competitors can evaluate the business strategies that other company are using

Suppliers - suppliers provide extra credit limit to a company on the basis of performance of company in financial statements

Government - Government ensures that all the rules and regulations are being complied by companies and payment of taxes on due dates

Public or outsiders - Anyone from public may want to do a research on a company, for this reason financial statments will be required