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User Groups And Their Usage Perception Of Financial Statement - Essay Example

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This paper outlines the significance of the financial statements of Transforms PLC and Toro track Plc along with the users of the same. Both the companies are UK-headquartered as well as listed on London Stock Exchange and operate under automobile industry. …
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User Groups And Their Usage Perception Of Financial Statement
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Download file to see previous pages The above discussion is totally emphasized on the user groups of financial statements of Torotrak Plc and Surface Transformers Plc. The companies have been analyzed by considering the 3-year financial statement. Both internal and external user groups of the financial statement have been considered such as investors, lenders, suppliers, management, employees and the Government. This analysis shows the various perspectives in which each user analyze a financial statement.
From investor’s point of view, it can be considered that company’s share prices are low and as a rational investor, buying shares of this company can prove to be profitable in the future. As the companies are in developing phase, the payables are quite high, but if seen on a year-on-year basis, it is also reducing. Hence, a supplier would not bother to stop their supply as they are getting paid. The analysis has illustrated the responsibility of management to evaluate and maintain efficiency and profitability of the firm by emphasizing on their efficiency to retain profit by maximizing the utilization of resources. Employees generally look into profit making of the company to understand their potential in terms of providing remuneration in an efficient and timely manner. Government focuses on taxes and as these companies are loss making, the tax levied on them are also low. Finally, it could be concluded that even if the companies are bearing losses, they are still trying to control their costs, use their resources effectively and reduce the gap of their losses over year-on-year. ...Download file to see next pagesRead More
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