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Solution
3-2
Following are the basic users of financial statements:
1) Management of the company: They use financial statement to analyze company’s
performance and find the areas they need to improve in.
2) Creditors or lenders: Creditors analyze short term and long term solvency of the company
before granting any credit to them
3) Shareholders and Investors: Shareholders and investors use financial statement to analyze
strength and weakness of the company and make judgment about the growth potentials.
4) Government: Government uses financial statements to analyze the pre tax income of the
company and determine their tax liability.
5) Investment analyst: They uses financials statements of a company to analyze and
recommend what stocks their clients should invest in.

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Solution 3-2Following are the basic users of financial statements.pdf

  • 1. Solution 3-2 Following are the basic users of financial statements: 1) Management of the company: They use financial statement to analyze company’s performance and find the areas they need to improve in. 2) Creditors or lenders: Creditors analyze short term and long term solvency of the company before granting any credit to them 3) Shareholders and Investors: Shareholders and investors use financial statement to analyze strength and weakness of the company and make judgment about the growth potentials. 4) Government: Government uses financial statements to analyze the pre tax income of the company and determine their tax liability. 5) Investment analyst: They uses financials statements of a company to analyze and recommend what stocks their clients should invest in.