Accounting Information That Shareholders Need

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Shareholders are considered as the owners of a company and thus, have the right to get all types of information regarding the company and its operations. By providing necessary funds to the company, shareholders become entitled to know about the income and expenditure details of the company.

Shares of a company are listed at stock exchanges, which require company to provide accurate accounting information to the shareholders at regular intervals. Shareholders must have an easy access to different types of accounting information so that they can decide about their investment in the company. Shareholders can find all the needed information under ‘Investor Relations’ at the website of company.

Financial Statements And Projections

One of most important accounting information needed by shareholders is financial statement. These are provided in the form of annual reports and quarterly results. By going through financial statements, shareholders can know about the profits or losses incurred by the company in a particular period. Since past data is also given along with current data, performance of company can be established. Various types of financial statements that can be accessed by shareholders are cash flow statement, balance sheet, profit and loss account and equity statement.

Through these statements, a shareholder can also know about the shareholding pattern of the company. Since dividend is paid out of profits and not out of capital, shareholders can know if there are any chances of getting dividend or not. Balance sheet is considered as the most important financial statement as it provides a deep insight into the debts, assets and capital of company. If any shareholder feels that economic health of company is falling, shares may be sold at stock exchanges.

For ensuring that shareholders remain invested in the company, financial projections are also provided to shareholder. These statements provide information about the future sales and income figures. If there are any expansion plans of the company, these are also incorporated into financial projections.