Q.4 Who are the Users of financial statements ?
वित्तीय विवरण के उपयोगकर्ता कौन हैं?
Ans:
Internal users
- Shareholders
- Management
- Employees :
External users :
- Bank and Financial Institutions
- Debenture holders and future investors
- Creditors
- Government & other Departments
| Source : 12th RBSE : Chapter 10 – Page number : 332 |
| Keywords: Internal users, External users : |
| Extra Info : Users of financial statements may be divided in into two groups, internal users and external users. (A) Internal users : 1. Shareholders : They invest in the capital, as such they always have interest in profitability, financial capacity and liquility position of an enterprise. All the information are contained in financial statements. 2. Management : Managers are responsible for overall performance of an enterprise. Management is responsible for the safety of investments along with profitable use of its resources. As such, they obtain such information from the financial statements, so that they may measure the working efficiency and profit earning capacity of an enterprise. The financial statements for them are as important as hammer and nail for the artisan. 3. Employees : Employees will receive bonus on the basis of financial position of the organisation. The financial position of the organization also affects the welfare plans for the employees. As such, they always have interest in knowing financial position of the enterprise. (B) External users : 1. Bank and Financial Institutions : The financial statements are also of great utility for banks and other financial institutions, who provide long term credit facility to the organization, which depends upon its profitability, liquility and solvency, which is obtained from financial statements. 2. Debenture holders and future investors : Debenture holders wish to know about the solvency and interest payment capacity of the enterprise, whereas future investors wish to know about the amount of profit, dividends and market position. They all want to know about financial strength of the enterprise, which may be obtained from its financial statements. 3. Creditors : They wish to know about liquility and financial strength, which also can be ascertained from the financial statements of the enterprise. 4. Government & other Departments : Government wants to know about financial performance from financial statements for making policy decisions and for enactment of Laws, rules and regulations. Other departments of the government, viz, GST department, income tax department, costom duty department etc., and others also need information about sources of revenue etc. use and financial statements for the fulfillment of this purpose. |