equity and stakeholders Flashcards
equity and stakeholders:
what does an enterprise receive when it sets up as a company?
receives money from Investors who buy shares
equity and stakeholders:
where does the shares appear on the balance sheet as?
equity
equity and stakeholders:
what does the equity figure tells shareholders of?
the total amount that their shares are worth.
equity and stakeholders:
what does the shareholders receive as a reward for investing?
receive regular dividends from the company’s profits. This means they
have a stake in the enterprise doing well.
equity and stakeholders:
what does an equity show of the shareholders?
how much the shareholders own of the enterprise
equity and stakeholders:
what does an equity show what the enterprise has done with?
any retained profit
equity and stakeholders:
what does an equity show owned by the enterprise?
the appreciation of any assets owned
Other stakeholders and financial documents:
what could be classed as a liability?
owner’s equity
Other stakeholders and financial documents:
why is the owners equity different from other liabilities?
as it does not need to be repald by a certain date and it is not a fixed amount.
Other stakeholders and financial documents:
why is the owners’ equity usually left in the enterprise?
as long as necessary and can change in value.
Other stakeholders and financial documents:
what is a residual claim on the enterprise?
after all other liabilities have been paid
Other stakeholders and financial documents:
what is the owners’ equity if Assets = Liabilities + Owners’ equity?
Assets - Labilities
Stakeholders and their interest in
financial information of an enterprise: lenders
why do lenders rely on financial information?
understand the health and risks of the enterprise
Stakeholders and their interest in
financial information of an enterprise: lenders
what can the lenders access to?
llauidity cash flow and overall solvency
Stakeholders and their interest in
financial information of an enterprise: government
what do they require financial information for?
company tax and VAT purposes
Stakeholders and their interest in
financial information of an enterprise: government
what can government make decisions about?
the economy based on the financial performance of all enterprises and businesses
Stakeholders and their interest in
financial information of an enterprise: customers
why are they interested in enterprise that they want to buy goods from?
to judge its financial ability as a supplier of goods for them to remain solvent long enough to provide the goods and
services necessary
Stakeholders and their interest in
financial information of an enterprise: employees
what do employees get given information on? (3)
the financial health, number of sales and profitability
Stakeholders and their interest in
financial information of an enterprise: employees
what can they determine? (3)
job security
possibility of future pay rises and bonuses
benefits and employment opportunities
Stakeholders and their interest in
financial information of an enterprise: owners and managers
what does it give an indication of?
the financial health of the enterprise, including liquidity and profitability
Stakeholders and their interest in
financial information of an enterprise: owners and managers
why do they have a guided strategy?
to meet goals
Stakeholders and their interest in
financial information of an enterprise: owners and managers
wha does it allow managers to make big decisions about?
the future of the enterprise, for example whether to expand
Stakeholders and their interest in
financial information of an enterprise:
suppliers
why are they interested in enterprises financial statements?
to assess risk and therefore whether they are credit worthy
Stakeholders and their interest in
financial information of an enterprise:
suppliers
what do they want to ensure before they offer credit?
want to ensure the enterprise has a healthy financial situation and can repay debts on time
