Holding of Share:
Shareholders are the
owners of the company. The financial statement analysis is important as
it
provides meaningful information to the
shareholders in taking decisions.
Decisions And Plans:
The management of the company is responsible for taking decisions and formulating plans and policies for the future. They, therefore, always need to evaluate its performance and effectiveness of their action to realize the company's goal in the past. For that purpose, financial statement analysis is important to the company's management.
Extension Of Credit:
The creditors are the providers of loan capital to the company. Therefore they may have to take decisions as to whether they have to extend their loans to the company and demand for higher interest rates. The financial statement analysis provides important information to them for their purpose.
Investment Decision:
The prospective investors are those who have surplus capital to invest in some profitable
opportunities. Therefore, they often have to decide whether to invest their capital in the
company's share. The financial statement analysis is important to them because they can
obtain useful information for their investment decision making purpose.