FIN2603 Assignment 1
(COMPLETE ANSWERS)
Semester 1 2025 - DUE 2 April
2025
FOR ASSISTANCE CONTACT:
, FIN2603 Assignment 1 (COMPLETE
ANSWERS) Semester 1 2025 - DUE 2 April
2025
Question 1 List and discuss the diverse range of
stakeholders utilising organisations' financial
statements. (14)
Stakeholders Utilising Organisations’ Financial Statements
Financial statements provide crucial financial information to a variety of
stakeholders, each with unique interests and objectives. Below is a list of key
stakeholders and a discussion of their relevance in using financial statements.
1. Investors and Shareholders
o Investors assess financial statements to evaluate the profitability,
stability, and growth potential of an organisation.
o They rely on key financial metrics such as earnings per share (EPS),
return on investment (ROI), and net profit margin.
2. Managers and Executives
o Internal management uses financial statements to make strategic
business decisions, such as budgeting, cost control, and investment
planning.
o They also use them to evaluate operational efficiency and financial
performance over time.
3. Employees and Trade Unions
o Employees and their representatives use financial statements to
determine job security, salary negotiations, and potential bonuses.
o Trade unions may analyse financial health to advocate for better
wages and working conditions.
4. Creditors and Lenders
o Banks and financial institutions assess financial statements to evaluate
the creditworthiness of an organisation before issuing loans.
o They focus on solvency ratios, liquidity ratios, and debt levels to
ensure that the business can repay debts.
5. Suppliers and Trade Creditors
o Suppliers use financial statements to assess whether the organisation
has the ability to pay for goods and services.
(COMPLETE ANSWERS)
Semester 1 2025 - DUE 2 April
2025
FOR ASSISTANCE CONTACT:
, FIN2603 Assignment 1 (COMPLETE
ANSWERS) Semester 1 2025 - DUE 2 April
2025
Question 1 List and discuss the diverse range of
stakeholders utilising organisations' financial
statements. (14)
Stakeholders Utilising Organisations’ Financial Statements
Financial statements provide crucial financial information to a variety of
stakeholders, each with unique interests and objectives. Below is a list of key
stakeholders and a discussion of their relevance in using financial statements.
1. Investors and Shareholders
o Investors assess financial statements to evaluate the profitability,
stability, and growth potential of an organisation.
o They rely on key financial metrics such as earnings per share (EPS),
return on investment (ROI), and net profit margin.
2. Managers and Executives
o Internal management uses financial statements to make strategic
business decisions, such as budgeting, cost control, and investment
planning.
o They also use them to evaluate operational efficiency and financial
performance over time.
3. Employees and Trade Unions
o Employees and their representatives use financial statements to
determine job security, salary negotiations, and potential bonuses.
o Trade unions may analyse financial health to advocate for better
wages and working conditions.
4. Creditors and Lenders
o Banks and financial institutions assess financial statements to evaluate
the creditworthiness of an organisation before issuing loans.
o They focus on solvency ratios, liquidity ratios, and debt levels to
ensure that the business can repay debts.
5. Suppliers and Trade Creditors
o Suppliers use financial statements to assess whether the organisation
has the ability to pay for goods and services.
