Introduction to Financial Accounting

Introduction to Financial Accounting
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Introduction to Financial Accounting
Financial information is not only useful to a firm’s management but also to other stakeholders. One of the key stakeholders that benefit from financial information evaluation is investors. According to Lev (2018), investors are primarily the intended users of financial reports containing essential information about a firm’s financial situation. Investors essentially evaluate the financial information of a firm to determine its financial health and valuation. As Ainsworth and Deines (2019) reveal, investors are a source of capital/financing for companies, and they need to evaluate financial information to assess the company’s financial condition. Investors commit their money to a firm for as long as it is operational or as long as they own stock in that firm. As such, they have to evaluate financial information to ensure that their investments are safe. Investors want to invest their money in a firm wit...