Users of the financial statements and annual reports.

Though accounting records and reports a company’s transactions, many different parties benefit from this information. These individuals — called financial statement users

Shareholders of the company

The company owners, want to assess how well the management is performing. they want to know how profitable the company's operations are and so the potential for dividend payments as well as whether their investment is sound.


Managers of the company

Managers of the company appointed by company owners to supervise the financial situation of the company as it is currently and as it is expected to be in the future. this is to enable them to manage the business efficiently and to make effective decisions. they are particularly interested in detailed information such as the profitability of particular product lines or the age of receivables.

Employees of the company

employees should have a right to information about the company's financial situation because their future careers and the size of their wages and salaries depend on it.


Suppliers

Suppliers provide goods to the company on credit, they want to know about the ability of the company to pay its debts.

Competitors

If you were a manager at PepsiCo, would you be interested in knowing the relative profitability of Coca-Cola's operations in the United States, Brazil, Japan, and France? Of course, you would, because that information could help you identify strategic opportunities for marketing efforts where potential profits are high or where your competitor is weak. Similarly, Wal-Mart can use information in financial statements to track its competitors and identify new opportunities to grow and use its market share in retail to increase its revenues in other ventures.

Customers

They need to know that the company is a secure source of supply and is in no danger of having to close down.

Government and their agencies

These parties are interested in the allocation of resources and therefore in the activities of business entities. they also require information in order to provide a basis for national statistics.

Lenders

Lenders have an interest in both a company’s profit and cash flow. These users may have given loans to the business. Companies with an inability to repay the loans increase the lender’s risk. Lenders often require several months of financial statements for review before lending money. Periodic updates are also necessary to ensure borrowers still have the ability to repay loans.