1 Groups and consolidation: an overview

Management
will use comparisons to ensure that the business is performing efficiently and 
according to plan. 
(b) 
Employees
, trade unions and so on need information to be able to assess the employer's stability 
and profitability, and their ability to provide remuneration and other benefits.
(c) 
Governments 
need to be able to assess taxation and regulate industries, as well as using 
information for statistical purposes.
(d) 
Present and potential 
investors
will assess the company with a view to judging whether it is a 
sound investment. They need information on risk and return on investment and the ability of the 
entity to pay dividends.
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CHAPTER 26
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INTERPRETATION OF FINANCIAL STATEMENTS 
 
459 
(e) 
Lenders
and 
suppliers
will want to judge its creditworthiness, to assess whether loans and related 
interest and invoices will be paid when due.
(f) 
Customers
will want to judge whether the company will continue in existence, especially where 
they have a long-term involvement with the company or a dependence on their products.
This Interactive Text is concerned with financial rather than management accounting and the ratios 
discussed here are therefore likely to be calculated by external users. The following sources of 
information are readily available to external users. 

Published financial statements 

Documents filed as required by company legislation 

Statistics published by the Government 

Other published sources eg 
Investor's Chronicle
, 
The
Economist, Wall Street Journal 
1.2 Financial analysis 
The