Interpretation and analysis of financial statements is used for several purposes. Some of them are listed below:
- Investment decision making by existing and potential users.
- By auditor to determine to express an opinion regarding the true and fair view of financial statements.
- By creditors to determine the credit standing of the entity for advancement of loan and subsequent follow-up.
- By senior management to determine the performance related pay.
- By employees to bargain pay packages based on performance of the entity.
- By customers to determine the future availability of goods or services etc.
- By suppliers to determine the ability to pay debts by the entity and opportunity to supply goods or services in future.