NAME IC NO ID NO COURSE SUBJECT LECTURER NAME

: RABIATUL ADAWIYAH BINTI KHIRUL ANUAR : 910731-14-5768 : SC-KL-00027927 : BA(HONS) MARKETING AND BUSINESS : ANALYSING ORGANISATIONAL PERFORMANCE : MS SHEELA

Financial statement of an organization is considered as an important tool for many users of accounts. Discuss on the various users of accounts and their areas of concern.

According to (http://www.wisegeek.com), financial statements are records that provide an indication of an individuals, organizations, or business financial status. These include profit and loss account, balance sheets, and cash-flow statements. Typically, financial statements are used in relation to business endeavors.

Based on (http://tutor2u.net), Investors are more focus on risks of their investments. They must decide whether worth it to invest in a business. They simulate the current profit and loss account and attempt to predict its future profitability. Their main field of concern is whether the company is able to pay dividend to its owner based on profits. According to (http://www.accountantnextdoor.com), Suppliers and creditors require information on whether the company is able to pay the debts in a given duration. They need to be convinced that the company is liquid enough to meet with her obligations upon maturity. Creditors will look information on cash flow and management of working capital. Government will formulate strategic plan for business in the form of financial report. They need information on business profitability for taxes purposes which directly obtained from profit and loss account.

As for the employees, they concerned about their benefits in the company about employment prospects, pensions funding and others. Employees will look information on profit growth, revenue, levels of investment in the business and valuation of company pension schemes. Companys shareholders are the real owners of a business and needs information from those that manage the business on their behalf. The profitability to ensure the businesss continuity will be one of the major areas that the shareholders will look for. As they own the business, they really need to vet through the businesss financial statements as they are responsible for the accuracy of the accounts. Furthermore, the financial statements will be acted as baseline for any decision made where it will definitely impact the profitability of the business. Financial institution is one of the major users to the financial statements. Even before the business starts and plan to getting loans, they will require the business plan which mainly concentrates on financial statements. It will show whether the business will be profitable enough and also how they plan to manage their cash flow. Meaning to says, the liquidity and profitability will be the major area that they are concerned on financial statements.

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List of references

http://tutor2u.net/business/accounts/users_accounts.htm

http://www.accountantnextdoor.com/users-of-accounting-information-system/

http://www.wisegeek.com/what-are-financial-statements.htm