Importance of Financial Statements

In: Business and Management

Submitted By BungaAklavla
Words 295
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THE IMPORTANCE OF FINANCIAL STATEMENTS TO SHAREHOLDER. * To educate shareholder
A company’s financial conditions would be the major concern for shareholders. As a capital providers, shareholders depends on the company’s financial statements for knowing the company’s financial conditions each for both safety and profitability of their investments. Moreover, shareholders need to know where their money went, how it is spent and where is it now? The financial statements especially balance sheet confirms such query by providing specific information about a company’s asset investment. Thus, this will be educating the shareholders of Kenny Rogers in which how did they use the investment capital to earn revenues. * Shareholder’s equity care
The financial statements, especially statement of shareholder’s equity exhibit an important information to shareholder because of the alteration in various equity components beginning with the starting capital and the events that made it increase and decrease. Ending components exhibits the company’s net worth. A fluctuating growth in a firm’s shareholder’s equity by way of decreasing the retained earnings, as opposed to smaller shareholder base. This means the reduction of investment returns for current equity shareholder. * Performance indicator
Shareholder’s concern is also in the company’s management proficiency. Most shareholder will be comparing a firm’s management with another firm, or comparing from time to time. Shareholder nowadays is looking beyond financial indicators. A better company management will be another performance indicator for shareholder to zoom, rather than only focusing on the revenue earn only. Such as, an ethical companies in a daily operation believes to be more sustainable to certain shareholder. For instance, Kenny Rogers offers a healthy food. This attracts the health – conscious people…...

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