the use of financial documents Flashcards
what is quantitative information
information expressed in numbers
what is auditing
a financial procedure checking the accuracy of a company’s financial statements
why do managers analyze financial statements
to make comparisons, to justify higher salaries if the business is profitable
why do banks analyze financial statements
to evaluate if the business can repay loans and has no unpaid debts
why do employees analyze financial statements
to negotiate wages, to ensure job security
why do owners analyze financial statements
to see if the business is profitable or worth further investment
why do shareholders analyze financial statements
to check if they can receive higher dividend payments
how do financial documents help with funding decisions
they reveal if the business has enough cash to fund future expenses
why do suppliers analyze financial statements
to check the creditworthiness of the business and ensure it can pay for goods
how can financial documents help increase profitability
they highlight ways to improve, such as raising selling prices to boost gross profit margin
how can financial documents help reduce costs
income statements show rising costs, ratio analysis evaluates profitability
how do financial documents help with investment decisions
they show cash availability for expansion but are not sufficient for risky decisions
why might governments use financial documents
to monitor economic progress and the success of policies
why might competitors use financial documents
to compare figures with rivals and evaluate their level of success
why might the media use financial documents
to produce reports on business and commerce
