Uses of Financial Information Flashcards
Creditor
What credit limit should we give the business?
How much profit is the business making to cover debt repayments?
What other liabilities does the business have to pay?
Managers
How much profit are we making?
What were our sales? Did they improve?
What inventory should we discount this week?
Are there expenses we can cut back?
Are staff meeting their targets?
Bank Manager
Do they have security to cover a loan?
Should we increase the loan?
What other liabilities do they have?
What is the value of the net assets?
Does the business make enough profit to pay their interest payments?
Prospective owner
What is the return that I might get on this investment?
How much profit is this business making? Is it a worthwhile investment?
Government (IRD)
Is the business paying the correct tax?
How much GST does the business owe?
How much income did the business make (to calculate the tax to pay)?
Owners
What return am I getting on the investment?
How much profit am I making?
Should I expand my business?
Is my investment (capital) safe?
What security (net assets) does the business have?
