Accounting Tools

Financial statements provide information on businesses to potential stakeholders (Young et al., 2019). They provide a snapshot of the business' financial health during a particular point in time (Maverick, 2022). Customers use financial statements to determine whether the company can deliver long-term promises (Young et al., 2019). They give insight into its performance operations, cash flow, and overall conditions (Maverick, 2022). It is essentially a look into the company's revenue, expenses, profitability, debt load, and the ability to meet short and long term obligations (Maverick, 2022). When considering different suppliers for a major contract, customers may want to review these statements in order to judge financial ability (Accounting Tools, 2023). They want to know if they will be able to remain in business long enough to provide the goods or services mandated in the contract (Accounting Tools, 2023). A good example would be a copy called Taiwan Semiconductor Manufacturing Company (TSMC) and its customers Apple and Intel (Young et al., 2019).