Financial Statement report Essay Example | Topics and Well Written Essays - 1500 words

Financial Statement report - Essay ExampleThe users of financial statements be the various stakeholders of a company that are concerned with the companys feat, progress and purview during a financial year. The financial statements should provide useable instruction to the relevant users and stakeholders of the company with respect to their specific needs. The main users of financial statements and their needs are discussed downstairsThis is the most important group interested in the financial performance, financial strength, financial adapt force, cash generation and cash flow status of the company. The shareholders and investors invest their cash into the company and need the information from financial statements to asses the companys performance in terms of managing and utilizing their investments and generating profit out of it.The lenders and creditors of a company are interested in the companys position in terms of liquidity and solvency. The financial statements of a co mpany should provide relevant information to its various lenders and creditors so as to enable them to analyze the companys ability to pay its short and long-term liabilities and obligations.The regulatory authorities and organisation agencies are concerned with the full and clear disclosure of information in the companys financial statements. The government ensures that the company prepares the financial statements in the light of relevant rules and regulations. ... The disclosure of relevant information can strengthen the customer trust in the company. General creation and AnalystsGeneral public and analysts could be considered as the companys prospective investors or they may approach the companys financial statements to provide the information regarding the companys investment and profitability potential to the investors. They are concerned with the companys financial position and performance to analyze the future prospects of the company.INTERNAL USERSManagementThe companys m anagement is also among the major users of financial statements. They need to draw expedient information from the financial statements in order to realize the companys revenues and their share in the companys profitability. Apart from that, they also need information from financial statements to analyze the result of their performance throughout the year and make provisions regarding the future.EmployeesThe employees are also the internal users of the companys financial statements. They are the one contributing their efforts in the companys performance and profitability. They need information from financial statements to evaluate how the company is compensating them for their efforts as compared to its overall profitability.NECESSARY QUALITIES FOR FINANCIAL STATEMENTSThe financial statements should contain the following qualities so as to provide maximum useful information to the various stakeholders of the companyUnderstandabilityThe financial statements should be readable and und erstandable for all its targeted users. All the information and disclosures included in the financial statements should be well-presented to help the