Bba0017-Smu File
BBA Semester IV
BB0017
Question 1- Which stakeholders require financial reports and why?
Answer 1-
Accounting reports are designed to meet the common information needs of most decision makers. These decisions include when to buy, hold or sell the company shares. It assess the ability of the company to pay its employees, determine profits to be distributed. 1. Investors: Broadly classifieds as retail investors, high net worth individuals, Institutional investors. As a chief provider of risk capital, investors are keen to know the return from their investments and risk associated 2. Lenders: Banks, financial institutions and debenture holders are the main lenders and they need information about the financial stability of the borrower enterprise. They use the information to monitor the economic stability of the company and to determine the capability of the company to repay the loans 3. Regulators, Rating agencies and Security Analyst: For seeking the information in assessing the prospective returns 4. Management: Needs the information to review the short term and long term solvency. To ensure the effective utilization of the resources, profitability and turnovers and investment. 5. Employees, trade unions and tax authorities: To get the information for company health, to decide the pay wage scale, declaration of bonus and other benefits. Tax authorities need information to assess the liability of the firm. 6. Customers: need information about the accounting details about the continuation of company especially when they have established a long term involvement 7. Government and regulatory agencies: Need information to regulate the activities of the company and when the tax laws needs to be amended 8. The public: Every company has the social responsibility and the public need information for their money held in.
Purpose of the financial reports to the above stakeholders is as under: * To monitor their investments and to
BB0017
Question 1- Which stakeholders require financial reports and why?
Answer 1-
Accounting reports are designed to meet the common information needs of most decision makers. These decisions include when to buy, hold or sell the company shares. It assess the ability of the company to pay its employees, determine profits to be distributed. 1. Investors: Broadly classifieds as retail investors, high net worth individuals, Institutional investors. As a chief provider of risk capital, investors are keen to know the return from their investments and risk associated 2. Lenders: Banks, financial institutions and debenture holders are the main lenders and they need information about the financial stability of the borrower enterprise. They use the information to monitor the economic stability of the company and to determine the capability of the company to repay the loans 3. Regulators, Rating agencies and Security Analyst: For seeking the information in assessing the prospective returns 4. Management: Needs the information to review the short term and long term solvency. To ensure the effective utilization of the resources, profitability and turnovers and investment. 5. Employees, trade unions and tax authorities: To get the information for company health, to decide the pay wage scale, declaration of bonus and other benefits. Tax authorities need information to assess the liability of the firm. 6. Customers: need information about the accounting details about the continuation of company especially when they have established a long term involvement 7. Government and regulatory agencies: Need information to regulate the activities of the company and when the tax laws needs to be amended 8. The public: Every company has the social responsibility and the public need information for their money held in.
Purpose of the financial reports to the above stakeholders is as under: * To monitor their investments and to