Hrm, company-of-origin, analysis

Classified in Economy

Written at on English with a size of 1.87 KB.

IMPORTANCE
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.
-The financial statement analysis is important to them because they can obtain useful information for their investment decision making purpose.

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