ACC290 Week 1 Discussion 2

Question: #7861

How would the financial statements be useful to managers and employees? How would the financial statements be useful to investors and creditors?

Financial statements alert investors of the risk that is involved in investing in the company. The information from these reports also allow investors to judge what type of return they will receive on their investment and it also helps them to determine whether to hold, buy, or sell. Creditors are concerned with any statistical financial information that helps them to determine the financial stability of the organization and whether the business will repay the loan payments on time. Creditors also want to determine the stability of the organization and understand where the money is coming in and where it is going out.

Managers need financial statements so that they can determine what activities within the organization are profitable or not. Managers also use this information to guide decisions, resources, and if operations should continue in the present manner...