HBM - Users of Financial Information

Users of Financial Information

Lenders eg, Banks

• Looking at the solvency of a business

• Decide to give/not give a loan
  

Competitors

• Rivals are interested in monitoring the profits earned by competitors

• Measure success against each other

HMRC

• Government (HMRC) use financial information to calculate tax payments

Suppliers

• Government (HMRC) use financial information to calculate tax payments

Multiple Choice

HMRC use financial information to...

• calculate tax payments

• measure success against rivals

• decide to give/not give a loan

• check solvency of a business

Owners

• Owners will look at financial statements to help them make decisions

• Used to assess profits made

Employees

• Employees will use them to ensure their jobs are secure

Trade Unions

• TUs will use to assess whether members are due a pay rise

Investors

• Investors want to assess the potential for investing into a company

Multiple Choice

Trade unions will use financial information to...

• to assess whether members are due a pay rise

• help them make decisions

• ensure their jobs are secure

• assess the potential for investing into a company

Categorize

Options (8)

Bank - will the business be able to make repayments in the future?

Managers - are we spending too much on our wages, leading to a loss?

Managers - are we able to pay back debts? Looking at working capital.

Managers - we may need to apply for an overdraft due to a deficit next month

Managers - can we find a cheaper supplier? Our cost of sales figure is too high.

Shareholders - how much return on investment are we getting? I can look at the equity figure.

Suppliers - can the business pay for goods/services?

Managers - to aid decision making

What information would users of financial information be interested in?

Cash Budget

Income Statement

Statement of Financial Position

ALL 3 documents