2006-07-17 20:30:59 · 4 answers · asked by tiffanywong_84 1 in Business & Finance ➔ Other - Business & Finance
It tells you whether the company is in the ups or downs.
It also tells you if the company exists or not.
It MAY tell you if the company is cheating on its taxes.
It tells you whether the company is worth investing in or not.
It tells you about who owns the company, how it is making profit, what are its liabilities, and whether it is able to cope with them.
For some people, it is important because it is their job.
2006-07-17 20:32:01 · answer #1 · answered by digileet 2 · 0⤊ 0⤋
Looking at financial statements tells helps you determine how well a company is performing, and lets you make decisions as to how you think they'll do down the road.
For example, if you see profits have been steadily falling, would you be happy? No! Would you want to know the reason(s) why? Absolutely! Looking at the financial statements can help you find the reason(s) as to why these profits are dropping. Is it because costs are out of control? Is it because of bad investments? Is it because of higher interest rates? etc.
And if your company wants to borrow money, those financial statements are critical. If the bank doesn't think you are financially secure enough, do you think you'll get the best interest rate? No! And if you're bad enough, you may not even get the loan at all.
So financial statement analysis helps company management determine how well they're doing, helps investors decide whether the company is a good investment, and helps bankers decide how much to charge them to borrow money.
2006-07-18 00:11:32 · answer #2 · answered by msoexpert 6 · 0⤊ 0⤋
because every business man wants to know about his business whether it is growing or not. so they take suitable steps by analysing their financial statements.
2006-07-17 20:41:14 · answer #3 · answered by vipan c 1 · 0⤊ 0⤋
more could be said
2006-07-17 20:33:16 · answer #4 · answered by boy_jam_arch 6 · 0⤊ 0⤋