Lesson 2: Interpreting company accounts

Lesson 2: Interpreting company accounts

When interpreting financial statements it is important to ascertain who are the users of accounts and what information they need:

  • shareholders and potential investors are primarily concerned with receiving an adequate return on their investment, but it must at least provide security and liquidity
  • suppliers and lenders – concerned with the security of their debt or loan
  • management – concerned with the trend and level of profits, since this is the main measure of their success.
 

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