• Private and public businesses, along with organizations such as charities or government services, are accountable to parties known as stakeholders. A stakeholder could be anyone from a customer to a supplier, a member of an employee's family or another individual interested in helping an organization reach its targets and goals. A stakeholder will be interested in the finances of a company in order to ascertain the organization's performance. This information reveals the assets that the company owns, the amount of money that they owe to creditors, its profitability and how much they have invested in the organization. On the whole the information gives the stakeholder a comprehensive idea of how the business is managed.
• A stakeholder will also want to be kept abreast of the financial information of an organization as it affects the equity of the company. In the past the conventional goal of any business was to maximize profits. These days things are different mainly down to the ever-changing business world in which the organization operates. The equity is now constantly affected by figures and statistics. Factors such earnings per share, total company sales, employee turnover and size and management/customer satisfaction all of have an impact on the equity of the business.
• The stakeholder may also be interested in providing capital to the organization in return for a share of the company. This share of equity and profits will be proportional to the investment. Therefore, as any potential investor would, the stakeholder will want to see the company's financial statements in order to ascertain whether or not the investment would be financially beneficial.
• A stakeholder will also want to be kept abreast of the financial information of an organization as it affects the equity of the company. In the past the conventional goal of any business was to maximize profits. These days things are different mainly down to the ever-changing business world in which the organization operates. The equity is now constantly affected by figures and statistics. Factors such earnings per share, total company sales, employee turnover and size and management/customer satisfaction all of have an impact on the equity of the business.
• The stakeholder may also be interested in providing capital to the organization in return for a share of the company. This share of equity and profits will be proportional to the investment. Therefore, as any potential investor would, the stakeholder will want to see the company's financial statements in order to ascertain whether or not the investment would be financially beneficial.