3.5.1 Interpretation of Financial Accounts Flashcards
Stakeholder interests in statement of comprehensive income: Shareholders
Interested in profit for the year as this may indicate potential returns for shareholders.
Stakeholder interests in statement of comprehensive income: Managers
Use revenue, gross profit and operating profit to measure performance and set targets.
Stakeholder interests in statement of comprehensive income: Government
To identify level of taxation business needs to pay.
Stakeholder interests in statement of comprehensive income: Employees
Profitability of business may indicate potential for rumination and rewards.
Stakeholder interests in statement of financial position: Shareholders
Analyse asset structure of business to see how investment has been spent.
Stakeholder interests in statement of financial position: Managers
Analyse liquidity and level of risk associated with debt.
Stakeholder interests in statement of financial position: Suppliers
Whether the business will be able to pay its debts and support any decisions around credit agreements.