Читать книгу Financial Accounting For Dummies - Maire Loughran - Страница 19

The onus is on financial accountants to make sure a company’s financial statements are materially correct. Important life decisions may hang in the balance based on an individual investing in one stock versus another. Don’t believe me? Talk to any individual close to retirement age who lost his or her whole nest egg in the Enron debacle.

Two of the three groups of financial statement users are making decisions based on those statements: investors and creditors.

Creditors look to the financial statements to make sure a potential debtor has the cash flow and potential future earnings to pay back both principal and interest according to the terms of the loan.

Investors fall into two groups:

 Those looking for growth: These investors want the value of a stock to increase over time. Here’s an example of growth at work: You do some research about a little-known company that is poised to introduce a hot new computer product into the market. You have $1,000 sitting in a checking account that bears no interest. You believe, based on your research, that if you purchase some stock in this company now, you’ll be able to sell the stock for $2,000 shortly after the company releases the computer product.

 Those looking for income: These investors are satisfied with a steady stock that weathers ebbs and flows in the market. The stock neither increases nor decreases in value per share by an enormous amount, but it pays a consistent, reasonable dividend. (Keep in mind that reasonableness varies for each person and his or her investment income goals.)

You can make money in two ways: the active way (you work to earn money) and the passive way (you invest money to make more money). Passive is better, no? The wise use of investing allows individuals to make housing choices, educate their children, and provide for their retirement. And wise investment decisions can be made only when potential investors have materially correct financial statements for the businesses in which they’re considering investing.