Types of information ?
When you read the accounting information, What type of information do you need?
User
|
Types
of needs to accounting information |
Investors/shareholders |
-
Assess how effectively the managers are running the business. -
Assess the ability to pay dividends. -
Make decisions to buy, hold or sell ownership shares of a
company. |
Lenders |
-
Evaluate the risks of granting credit or lending money. -
Assess the ability to pay interest and repay the amount borrowed.
|
Suppliers and other trade creditors. |
- Determine whether amount
owned to them will be paid when due trade creditors are likely to be interested
in an entity over a short period than lenders unless they are dependent upon
the continuation of entity as a major customer. |
Customers |
-
Know if the company will continue to honor product warranties
and support its products lines specially for long term plans. |
Competitors |
-
Compare performance |
Employees. |
-
Know about the stability and profitability of their employee
-
Assess the ability of entity to provide remuneration, retirement
benefits and employment opportunity. |
Governments, tax authorities, regulatory
agencies. |
-
Determine and assess taxation policies. -
Calculate national income and statistic -
Decide whether financial support is needed -
Tax authority need to know whether the company complies
or not. To calculate how much should they pay. -
Regulators need to know whether the company is operating
or not. |
General public |
-
Entities contribute to the local economy in many ways
including number of people they employ and their positions and salaries. |
|
|
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