Question 1

Investors are interest with the risk essential in and return provided by their investments. Besides
that, investors are normally the main group of external users that click to mind. (anonymous,
2014) Thus, investors in usual need to determine the rate of a company in order to decide
whether it is worth to buying, selling or holding a particular company stock. however, investors
use financial statements to determine and to predict future performance and company worth.
(Franco, 2015)

Suppliers the purpose require financial statements in order to determine whether it is safe to
extend credit to an organization. (Lan, 2013) Hence, they use financial statement to rate the
credit ability of a business and decide whether to supply goods on credit to a particular company.
However, they need financial statement to know whether the customers will able to repaid and
terms of credit are set as stated in the assessment of their customers financial wealthy.
(anonymous, 2014) Besides that, they use the financial statement of customers purpose to judge
whether they trustworthy enough to extend credit. (Franco, 2015) For instance, if a customer
orders 200,000 units from a supplier, the supplier wants to know whether the customer will be
capable to pay for these units before the supplier obtain the expense of producing them.

Stockholders use the financial statements to assess the company expediency and ability to make
future dividend payments. (anonymous, 2014) Besides that, they need the financial statement for
financial information in order to help them determine on what to do with their investments
(shares of stock) such as, hold, sell or more. (Franco, 2015)

Financial analysts gather financial information, analyze it, and make recommendations. (Franco,
2015) Besides that, they use the financial statement to determine whether to allow a
company working capacity or extend debt securities such as long-term, bank loans
or bond, in order to finance growth and other significant payment. (Lan, 2013)
Moreover, financial analysis use the financial statement to providing management
with a more detailed understanding of the figures.

Managers use financial statement to look at trends in their own business, and to compare their
own results with they competitors. (Franco, 2015) Hence, managers require financial statements
to make important business opinion affecting its continued operations. (anonymous, 2014) These
statements also are used as part of management's annual report to show the stockholders.

Governments use financial statement to decide the efficiency of tax stated in the tax returns.
However, government also keeps track of economic growth via analysis of financial statement of
businesses from different sectors of the economy. (Lan, 2013) Besides that, governments bodies
of the state, exclusively the tax authorities bodies, are interested in a performing financial
statement for taxation and administrative purposes. (anonymous, 2014) However, they use the
taxes are calculate based on the results of activity and other tax bases. In general, the state would
like to know how much the taxpayer makes to decide the tax due to thereon. (Franco, 2015)

Employees use financial statements for hopeful to note that some companies produce a separate
employees report. (anonymous, 2014)Thus, employees and their delegate require information on
business performance for two principal reasons which are salary negotiation and estimate of
current and forward opportunity in term of employment. (Lan, 2013) However, they would be
interested in order to financial stability and longer-term financial viability of the business.
(Franco, 2015)
References
anonymous. (2014). Users of Financial Statements. ACCOUNTING 101: THE
BASICSINTRODUCTION TO ACCOUNTING.

Franco, G. D. (2015). Financial reporting is used by owners, managers, employees,

investors, institutions, government, and others to make important decisions
about a business. IFRS Foundation.
Lan, J. (2013). Purpose of Financial Statements. Statement of Accounting Concepts,
62.