Importance of a balance sheet.

  • Helps the shareholders to know whether the business is in a position to meet its claims
  • Helps the investor to determine whether their funds are invested wisely
  • Helps to compare the performance of the business with that of previous years or similar business’s.
  • Helps the government to determine the tax to impose on the business
  • Help potential investors in making informed decisions on the share to buy in the stock exchange market.
  • Helps the management of the business to identify where urgent actions needs to be taken in order to promote the business.

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