Companys Financial Position and Performance - Essay Example

How the company’s share price has been throughout the year, what the audit report is saying about the company’s financial position and performance, and whether it provides a positive healthy financial position or the audit report raises some doubts over some aspects of the company. In addition, an investor must try to gain an understanding that how the company has obtained the financial numbers, it would be only possible by knowing its corporate strategies.

Many reasons require obtaining such information. For investors only relying on the provided annual report would be insufficient to convince them as recently many huge companies despite showing a remarkably healthy financial position become bankrupt and declared their bankruptcy; among them, the debacle of energy giant Enron, which declared bankruptcy in late 2001 (Barreveld, 2002, pp.118). Additionally, third-party evaluation presents more realistic as there are fewer chances of conflict of interest. Among them, the credit rankings issued by different ranking companies may offer some help as the ranking companies do not have, most of the time, any direct link or business dealing with the corporate companies.