This week’s article focuses on financial statements and how to analyse them. A company’s financial statements provide information on its performance and this information is valuable to different types of stakeholders. Management is interested in assessing the success of its strategies and plans relative to its past, as well as forecasted, performance and comparatively to its competitors’ performance. Employees are concerned with the company’s financial success since this affects their bonuses, job security and compensation. Investors utilise this information to determine the expected return on their investments. Broker-Dealers and investment advisers use financial statements to guide recommendations made to clients about whether to buy or sell the securities, such as equities and bonds, issued by that company.
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