Users of financial information Flashcards
1
Q
Why would managers be interested in financial information?
(5 points)
A
- Make operational decisions
- Analyse revenues and expenses
- Compare actual results to budgeted ones
- Cost consequences of course of action
- Measure the efficiency of the business
2
Q
Why are Investors/Shareholders interested in financial information?
(5 points)
A
- Includes stockbrokers comments
- See how the management have used funds at their disposal
- Future performance of the business
- Vote on proposals
- Invest or not?
3
Q
Why are Employees interested in financial information?
(4 points)
A
- Assess performance of business
- Is my job safe?
- Should we campaign for higher wages and better conditions?
- How viable are the different segments of the business
4
Q
Why are lenders interested in financial information?
(6 points)
A
- Includes short term payables and long term liabilities
- How secure is the loan?
- Is the company able to keep up with repayments?
- How liquid is the company?
- What is the value of the non-current assets of the company?
- How credit worthy is the company?
5
Q
Why are HMRC interested in financial information?
(2 points)
A
- To see the tax liability
- How many employees (NIC’ers contributions)
6
Q
Why are other government agencies besides HMRC interested in financial information?
(3 points)
A
Examine information about:
- environment
- corporate social responsibility
- pensions
7
Q
Why are members of local communities where a business operates interested in financial information?
(2 points)
A
- Environmental pressure groups, campaigners
- Use financial information to promote their cause
