3.4 Financial Documents

Question 1

What are the financial documents?

Answer 1

1. Income Statements
2. Financial Statements

Question 2

What do income statements show?

Answer 2

Income statements show profit, gross profit, expenses and etc.

Question 3

What are the uses of income statements to stakeholders?

Answer 3

Owners → To see how much they’ve earned

Shareholders → to see dividend payments and market value

Employees → job security is profit high, raises and profit-sharing schemes

Lenders → to see if business can pay loans, if the business is earning enough

government → tax

Suppliers → purchase of raw materials

Managers → asses business performance, source of finances

Question 4

What do financial statements show?

Answer 4

Assets, Capital and Liabilities