Short-term creditors – Short-term creditors would likely use profit and loss accounts, balance sheets and cash flow statements, in order to determine the liquidity of an organisation, their efficiency and potential growth of the organisation. They would be interested in this information, so they can judge whether or not an organisation will be able to pay for the goods which have been sold on credit and if it will be paid on time. The short-term creditor may also be interested in the growth of the company to determine security of a supply contract, and if a contract will increase over time.
Employees – Employees would be interested in using the profit and loss accounts and balance sheets to assess the profitability and stability of the organisation they work for or are considering accepting a job offer from. They would be interested in this information to see if their job is secure for the future, the opportunity of an increase in pay or the security of fringe benefits. People who may have received a job offer from an organisation will be considering security of employment and whether it is worth leaving their current employer.
Investors – Investors will be interested in the information contained in profit and loss accounts and balance sheets. This information will help assist them in what action to take with regards to purchasing new shares in a company, retain shares in a company or to sell shares they already own. They will also be interested in if the company is able to pay any dividends.
Customers – Customers will look into profit and loss accounts and balance sheets to determine the stability of the business. They will be interested in this information to determine the security and continuance of trading depending on the amount of involvement they... [continues]
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