interpretation of finaical statemnents

Statement of comprehensive incomes

Shows a firms revenue costs and profits

Indicates if firms profitability - if they have a n bet profit

Shareholders and comprehensive income

See how profitable firm is

The higher the profit the higher the dividends

Trends in net profit show shareholders how risky investments are - fluctuating profit is more risky than one with steady

Trends in how much of a businesses profit is spend on dividends - if fluctuates a lot or decreasing investor may not invest

Good firm to invest into is one who can increase revenue without increasing in costs - so will need to look at costs and revnue over time

Managers

Will be interested in the revenue and expenses of the firm order time to see if its changing- if revenues are decreasing or expenses are increasing they might then need to figure out why and make necessary changes

Statements may be made for each departments - so managers can see which departments shave highest costs

They can compare statements with competitors to see how they are performing - they can make decisions about tactics and strategies - also indicate if costs are too high - managers need to reduce the costs

Loan providers

Interested in the operating profit as this is where the intrest on loans is paid for

May be unwilling to lend money6 to business with a low operating profit as there is a risk that business wont pay back intrest

Suppliers

Suppliers might check if a firms revnue in the past has been good enough to pay its suppliers

Wont supply if dont get paid

Employees

Interested in profitability - more likely to continue trade and maintain employment

Look at net profit - wether they will get a pay rise or bonus and How much they would get

Liquidity

Ability to turn assets into cash