do not agree with the statement. Even though the statement of financial performance and financial position contains only past information but it is still relevant for decision making. The financial statement can help users to assess the financial health of a company. It is specifically helpful in determining the state of the company’s liquidity risk, financial risk, credit risk and business risk. The statement can also be used to analyze trends in the results of company operations which may be indicative of potential problems or areas for further improvement. In this sense, investors can refer the past information of the financial statement to decide whether is it worth investing the company for now.
In a nutshell, the past information can be the reference for the users to review. The reviewing of the financial statements allows for better economic decision making and avoid the previous mistakes that have done before. I do not agree with the statement.
Even though the statement of financial performance and financial position contains only past information but it is still relevant for decision making. The financial statement can help users to assess the financial health of a company. It is specifically helpful in determining the state of the company’s liquidity risk, financial risk, credit risk and business risk. The statement can also be used to analyze trends in the results of company operations which may be indicative of potential problems or areas for further improvement. In this sense, investors can refer the past information of the financial statement to decide whether is it worth investing the company for now.
In a nutshell, the past information can be the reference for the users to review. The reviewing of the financial statements allows for better economic decision making and avoid the previous mistakes that have done before.
