Users of financial information

There are internal and external users of financial information of a business and their needs to that information differ based on their respective roles. The table below summarizes the information needs of various users:

User Why they need financial information
INTERNAL USERS
Shareholder/ Owner share holders Shareholders/ owners want to know whether or not the business is profitable.
Management management Management wants financial information to be able to take informed decision about the business.
Employees employees Employees are interested in financial information as their remuneration and bonuses are usually linked with profitability of the business.
EXTERNAL USERS
Present and future investors investment To help them decide about their investment/ divestment decisions.
Creditors and Banks creditors and banks To determine the financial strength of the business while awarding any loan or credit and to determine the ability of the business to pay back.
Government authorities government authorities Need financial information in order to calculate/ assess the tax liabilities and other regulatory dues as applicable on the business.
Researchers/ analysts Researchers Researchers/ analysts use financial information as a base for their research or analysis.

 

One thought on “Users of financial information”

  1. rxoc says:

    good article very hopeful

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