1. Holding of Shares
-Shareholders are the owners of the company – Time and again, they may have to take decisions whether they have to continue with the holdings of the company's shares or sell them out.
-The financial statement analysis is important as it provides meaningful information to the shareholders in taking such decisions.
2. Decisions and Plans
-The management of the company is responsible for taking decisions and formulating plans and policies for the future.
-For that purpose, financial statement analysis is important to the company's management.
3. Extension of Credit
-The creditors are the providers of loan capital to the company.
-They may have to take decisions as to whether they have to extend their loans to the company and demand for higher interest rates.
-The financial statement analysis provides important information to them for their purpose.
4. Investment Decision
-The prospective investors are those who have surplus capital to invest in some profitable opportunities.
-They often have to decide whether to invest their capital in the company's shares or not.