Finance paper topics

1.4 The importance of Corporate published results to investors.

Published corporate results have different interpretations and functions that vary depending on who are reading the results. The primary objective of corporate financial results to an investor is to provide pertinent information regarding the financial strength, performance and any significant changes in the company’s financial position. Corporate financial results help both internal and external shareholders in making informed economic and investment decisions. Due to this essential purpose of corporate published results, it’s therefore of great essence for companies to prepare corporate financial statements that can be easily interpreted and the information used should be credible and reliable. This will make it easy for investors to compare different financial statements and make correct investment decisions. For example to determine the financial position of a company, an investor will evaluate its assets, liabilities and equity all contained in its balance sheet. On the other hand if an investor intendeds to find out a company’s financial performance, he will be more interested in knowing the company’s income and expenses in the income statement. In a corporate annual report, an investor will be more concerned with the financial statements.