Chapter 1
P1-1
1.
a. The company’s existing shareholders may want financial accounting
information in order to improve financial leverage and determine where
necessary adjustments need to be made.
b. Prospective investors may want financial accounting information in order
to analyze the risk associated with their potential investment, as well as
make project future profitability and growth.
c. Financial analysts who follow the company may want financial accounting
information in order to provide third parties with the most up to date
analysis on the company’s current financial state or make
recommendations based on the data collected.
d. Company managers will want to view financial accounting information in
order to maintain/improve company operations. They will be able to
determine where process improvements need to be made.
e. Current employees may want financial accounting information from their
company in order to determine the stability and longevity of their
employment.
f. Commercial lenders who have loaned money to the company may want
financial accounting information in order to monitor the financial state of
