How does information from financial reports influence business decision making?

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How information from financial reports influence business decisions? Why is it important for managers to understand the information contained in financial statements?

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This entry was posted on 04/02/2010 (Thursday) at 9:17 pm and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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2 Comments   »

  • Mystress L says:
    04.02.10 at 21:46

    Financial reports allow business managers to see current numbers compared to years prior. It will allow them to see growth or loss. It let's them know where the company stands in the "market place" and what percentage of consumer spending in that market place is being spent on that company. It also helps in forcasting - the fortune teller responsibility - the BM looks at the years prior and sees that an increase or decrease is approaching and can order stock more efficiently. For instance - a BM at Home Depot - he will look at financial reports to see when is the best time for snow blowers to hit stores in the New England area as opposed to the same item to hit stores in the Mid West. It also allows the producers of said snow blowers to see if they can take a price increase on the product in a given year and what time of year would it be best received by the consumers.
    Hope this helps.

  • rhythm says:
    04.02.10 at 21:47

    Financial information are factual information on the financial results of your operations. Many important financial information may be found in those reports.

    For example:
    -management decided to lengthen credit terms
    management would necessarily be interested to know how this decision affect the companies working capital or liquidity position and if such decision increased sales.

    - management decided to increase selling price
    financial report would show how the market responded to the price increase through the sales figures , the volume of sales, and the stocks inventory.

    There are many ways your figures can work for you if you know how to extract the information. Financial information keeps managers well informed of business condition and them better able to make good business decisions.


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