Financial information is important to business owners and managers since this is the way on how to monitor the financial activities of the business. With this, the progress of the business if it gains profit or losses can be documented. It can also monitor the flow of cash in the business. Also, it can assess how much the business costs and how much it has to cover. It can also contribute to future business decisions to be made by the management.
A limitation with this would be the comparability with other companies. Not all companies have the same accounting practices. Also, one company may be larger than another. A possible remedy to this limitation would be the use of vertical analysis in comparing financial statement of two different companies.
A limitation with this would be the comparability with other companies. Not all companies have the same accounting practices. Also, one company may be larger than another. A possible remedy to this limitation would be the use of vertical analysis in comparing financial statement of two different companies.