Who Uses Financial Statements And Why?

Who uses financial statement analysis?

The Role of Financial Statements For internal users such as managers, the financial statements offer all the information necessary to plan, evaluate, and control operations.

External users, such as investors and creditors, use the financial statements to gauge the future profitability and liquidity of a company..

Why do companies use financial statements?

The general purpose of the financial statements is to provide information about the results of operations, financial position, and cash flows of an organization. This information is used by the readers of financial statements to make decisions regarding the allocation of resources.

Who are the main users of financial statements?

The following list identifies the more common users and the reasons why they need this information:Company management. … Competitors. … Customers. … Employees. … Governments. … Investment analysts. … Investors. … Lenders.More items…•

Who uses general purpose financial statements?

General-purpose financial statements are issued throughout the year to aid investors and creditors in their decision making process. A set of general-purpose financial statements includes a balance sheet, income statement, statement of owner’s equity/retained earnings, and statement of cash flows.