Question

Discuss the utility and significance of financial statements for the various parties interested in a business concern.

Answer 1

Answer:

Significance of financial statement:

a) to determine the ability of a business to generate cash, and the sources and uses of that cash.

b) To determine whether the business has the capability to pay back it's debts.

c) To track financial results on a trend line to spot any looming profitability issues.

Various parties interested in business concern:

a) shareholders

b) investors

c) employers

d) suppliers

e) government

f) bankers

g) customers

etc. etc. etc.