Business and It’s Background

Stakeholders are individuals or organizations have dedicated interest in the involvement of particular business.

Stakeholders have interest in a business (but do not own it)

Shareholders own the business.

Investors

Potential investors, possibly the most valuable asset that can be used for any business or company. Most are interested in their potential profits and to know that they will receive something from their investment. 

Future profits may be estimated from how the company performed in the past and how it has shown on the income statement. The security of their investment is the most crucial thing not only for them, but for you too. It will be revealed by the financial strength and solvency of the company as shown in the statement of financial position. 

Key thing to note: the largest and most sophisticated groups of investors are the institutional investors, such as pension funds and unit trusts.

Government

These agencies need to know how your company  is performing in order to plan the financial policies. Tax authorities also use financial statements as a basis for assessing the amount of tax payable by a business.

Lenders

Another important factor to consider in your business. They need to know if they will be repaid and when it will take place. This is dependent on the solvency of your company (ie.: if you meet your long-term goals), which will all be revealed by the statement of financial position.

Long­-term loans may also be backed by ‘security’ given by the business over specific assets. The value of these assets will be indicated in the statement of financial position.

Employees

They need to know if an employer can offer secure employment and possible pay rises, alongside with a monthly salary that will be paid under no circumstance. They will also have interest in salaries and benefits enjoyed by senior management. It is important to note that customers need to know that a company can continue to supply them into the future! 

Suppliers 

They are what keep the business running in efficiency. You must let them know if and when they will be paid. New suppliers may also require reassurance about the financial health of a business before agreeing to supply goods.

Some companies also run programmed through which they support the environment, economy and community (for example supporting recycling companies, or setting local fundraisers). Everything listed above is a short, brief summary of the components in a business. For more information, contact us for a free consultation!