Pick which of the following statements is \\ are true: a. Financial statements p
ID: 470134 • Letter: P
Question
Pick which of the following statements is are true:
a. Financial statements provide measures of the success or failure of the firm’s strategies and policies, quantified in financial terms. Such information is valuable to the firm’s managers, as well as to stock and bond analysts, potential investors, bank loan officers, and competitors.
b. Some of the real useful features of the financial statements come from the help they provide in predicting the firm’s future earnings and dividends.
c. A firm’s management reviews its financial statements to determine if progress is being made toward company goals.
Explanation / Answer
All the above three statements about financial statement is true.
Financial statement provide measures of the success or faliure of the firm's strategies and policies,quantified in financial terms.Such information is valuable to the firm's managers as well as to stock and bond analysts,potential investors,bank loan officers and competitors.It is used by the managers to take important business decisions by analyzing the financial position of the company.It is used by the stock and bond analysts to take investments decision.It is useful for potential investors to assess the viability of investing in a company and to predict the future dividents.It is used by the bank loan officers to take decision regarding whether to grant loan to the company or not based on its financial health.It is very much useful for the competitors to compare their financial performance with the rival company and to take necessary corrective measures if necessary.
Some of the real useful features of the financial statement come from the help they provide in predicting the firms future earning and dividends.One of the most important feature of the financial statement analysis is to evaluate the past performance of the company on financial basis in order to predict its future profitability and cashflows.
A firm's management reviews its financial statement to determine if progress is being made towards company goal.With the use of financial statement managers sets business goals and objectives in financial term and also the outcome is measured and compared with the expected performance in financial terms.