Accounting Assigment
Question W 1-8
Shareholder of the oil company would be the ones most interested in the financial reports. The financial statements that would be disclosed, would eventually affect the price of the share. Their investment would be on stake. Higher price would mean a higher share price and more returns and dividends. Furthermore prospective share holders can decide whether they want to invest in the oil company or not and whether it is safe to invest in the company or not. The creditors of the company would want to know that whether the company would be able to pay its debts. Liquidity ratios would help these stakeholders determine the extent to which the company has the cash necessary to fund its operations.
The employees and management would also be interested in the financial statements as their bonuses and salary increases also depend on how the company is doing. Their job security is also on stake if the company is not doing well. Asset management ratios would help internal and external stakeholders to identify poor management. Another stake holder would be the government. The government of Alberta of Canada would want to know whether the company is operating legally by all means and where and how are the money and the financial resources used by the company. The government would also be interested in the taxes paid by the oil company. Oil companies are on many occasions criticized for polluting the environment because of their operations and on instances such as oil spills. The surrounding community would be also an indirect stakeholder as they are affected by the company’s disposal regulations. Too much pollution would cause community problems such the devaluation of the surrounding property and spreading of diseases. Auditors would have interest as the company is their client and they would be in a better position to know whether the company would be able to pay them on time and how much should they charge for their services. Market value ratios would
Shareholder of the oil company would be the ones most interested in the financial reports. The financial statements that would be disclosed, would eventually affect the price of the share. Their investment would be on stake. Higher price would mean a higher share price and more returns and dividends. Furthermore prospective share holders can decide whether they want to invest in the oil company or not and whether it is safe to invest in the company or not. The creditors of the company would want to know that whether the company would be able to pay its debts. Liquidity ratios would help these stakeholders determine the extent to which the company has the cash necessary to fund its operations.
The employees and management would also be interested in the financial statements as their bonuses and salary increases also depend on how the company is doing. Their job security is also on stake if the company is not doing well. Asset management ratios would help internal and external stakeholders to identify poor management. Another stake holder would be the government. The government of Alberta of Canada would want to know whether the company is operating legally by all means and where and how are the money and the financial resources used by the company. The government would also be interested in the taxes paid by the oil company. Oil companies are on many occasions criticized for polluting the environment because of their operations and on instances such as oil spills. The surrounding community would be also an indirect stakeholder as they are affected by the company’s disposal regulations. Too much pollution would cause community problems such the devaluation of the surrounding property and spreading of diseases. Auditors would have interest as the company is their client and they would be in a better position to know whether the company would be able to pay them on time and how much should they charge for their services. Market value ratios would