Financial statements: Explain the usefulness of financial statements to stakeholders of a company.

Explain in your own words how Income statements, Cash Flow Statements, Statement of Retained Earnings and Balance Sheets are useful to managers, investors, creditors, and employees.

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...these operational decisions.

Investors are interested in profits and financial strength (income statement and balance sheet). If consideration is being given to becoming an investor, cash flow might be of further interest for the ability to pay dividends. An investor who already owns stock will be interested in the valuation of their investment plus the payment of dividends. Financial strength shown on the balance sheet can be an indicator which financial analysts will read to tout the increasing value of a company. With higher ratings, more individuals will purchase stock. With increasing buyers, the stock price may increase. Investors would view the statement of retained ...