Answer to Question #152653 in Management for Wajahat Ali Raki

Question

Why financial analysis is important for stockholders and stakeholders of a public limited company?

Answer 1

Stockholders and stakeholders of public limited companies are entities that own one or more shares and make direct and indirect monetary contributions to the firms' operations. Consequently, financial analysis which includes balance sheets, income statements, and statement of cashflows help these groups in evaluating their investments. The financial statements also enhance their decision making, particularly when handling corporate matters. Stockholders and shareholders rely on finacial data to assess a company's performance.