Question

1. Discuss how the information needs of each of the following 10K users would be met by the 10K.

shareholders

creditors

employees

customers

financial analysts

Answer 1

Shareholders: Shareholders need the financial statements to know whether a particular company is making more profits so that they will come to a decision whether to invest in that particular company or not or to get more profits in the form of dividends, after they invest. Therefore, one of the users of Financial Statements are the Shareholders need this information to invest or buy shares in that particular company.

Creditors: Creditors are also one of the important users of financial statements who also needs the financial statements of a company whether to decide they can give loans to that company and whether they can get good amounts of interests without default in principles and interest. Therefore, Creditors are one of the important users of financial statements to know the stability of the company.

Employees: Employees who are working in a particular company are also needs to look at the financial statements to know how Company makes more profits and reducing its costs and performing more services to the company.

Customers: Customers are the ultimate end users of financial statements to know the current financial conditions are well in that company in terms of share price, rate of dividends etc.

Financial Analysts: Financial Analysts need to review the financial statements to analyse that particular company's growth and how it is performing compare with previous periods etc.. Based on these suggestions, investors will take decisions whether to purchase shares in that particular company or not etc.