Users of financial information

Users of financial information and why the information is of interest to them:
1. Investors
Investors require information on risk and return on investment and hence an entity’s ability to
pay dividends.
2. Employees
Employees assess an entity’s stability and profitability. They are interested in their employer's
ability to provide remuneration, employment opportunities and retirement and other benefits.
3. Lenders
Lenders assess whether an entity is able to repay loans and its ability to pay the related
interest when it falls due.
4. Suppliers and other trade payables
Suppliers assess the likelihood of an entity being able to pay them as amounts fall due.
5. Customers
Customers assess whether an entity will continue in existence. This is especially important
where customers have a long-term involvement with, or are dependent on, an entity, for
example where product warranties exist or where specialist parts may be needed.
6. Governments and their agencies
Government bodies assess the general allocation of resources and therefore activities of
entities. In addition information is needed to determine future taxation policy and to provide
national statistics.
7. The public
The financial statements provide the public with information on trends and recent
developments. This may be of particular importance where an entity makes a substantial
contribution to a local economy by providing employment and using local suppliers.