Question 1

Investors are concerned with the risk inherent in and return provided by their investments.
Besides that, investors are generally the first group of external users that click to mind.
(anonymous, 2014) Thus, investors in usual want to determine the value of a organization in
order to decide whether it is worth to buying, selling or holding a particular company stock.
however, investors read financial statements to determine and to help predict future performance
and company worth. (Franco, 2015)

Suppliers the purpose require financial statements in order to decide whether it is safe to extend
credit to a company. (Lan, 2013) Hence, they use financial statement to rate the credit capacity of
a business and determine whether to supply goods on credit to a particular company. However,
they need financial statement to know if they will be repaid and terms of credit are set as stated
in the assessment of their customers financial health. (anonymous, 2014) Besides that, they use
the financial statement of customers purpose to judge whether they trustworthy enough to extend
credit. (Franco, 2015) For instance, if a customer orders 200,000 units from a supplier, the
supplier wants to know whether the customer will be capable to pay for these units before the
supplier obtain the expense of producing them.

Stockholders use the financial statements to assess the company profitability and capacity to
make future dividend payments. (anonymous, 2014) Besides that, they need the financial
statement for financial information in order to help them decide on what to do with their
investments (shares of stock) such as, hold, sell or more. (Franco, 2015)

Financial analysts gather financial information, analyze it, and make recommendations. (Franco,
2015) Besides that, they use the financial statement to decide whether to allow a company
working ability or extend debt securities such as long-term, bank loans or debentures, in order to
finance expansion and other significant expenditures. (Lan, 2013) Moreover, financial analysis
use the financial statement to providing management with a more detailed understanding of the
figures.

Managers use financial statement to look at trends in their own business, and to compare their
own results with that of competitors. (Franco, 2015) Hence, managers require financial
statements to make important business decisions affecting its continued operations. (anonymous,
2014) These statements also are used as part of management's annual report to show the
stockholders.

Governments use financial statement to determine the accuracy of tax stated in the tax returns.
However, government also keeps track of economic growth via analysis of financial statement of
businesses from different sectors of the economy. (Lan, 2013) Besides that, governments bodies
of the state, especially the tax authorities bodies, are interested in an operating financial
statement for taxation and regulatory purposes. (anonymous, 2014) However, they use the taxes
are calculate based on the results of operations and other tax bases. In general, the state would
like to know how much the taxpayer makes to decide the tax due to thereon. (Franco, 2015)

Employees use financial statements for encouraging to note that some companies produce a
separate employees report. (anonymous, 2014)Thus, employees and their representatives require
information on business performance for two principal reasons which are salary negotiation and
assessment of current and forward opportunity in term of employment. (Lan, 2013) However,
they would be interested in order to financial stability and longer-term financial viability of the
business. (Franco, 2015)

References
anonymous. (2014). Users of Financial Statements. ACCOUNTING 101: THE
BASICSINTRODUCTION TO ACCOUNTING.
Franco, G. D. (2015). Financial reporting is used by owners, managers, employees,
investors, institutions, government, and others to make important decisions
about a business. IFRS Foundation.
Lan, J. (2013). Purpose of Financial Statements. Statement of Accounting Concepts,
62.