The Statement Of Financial Performance Is Based On Data Relating To Past Transactions And Events. Hence The Statement Of Financial Performance Is Of No Use To An Investor’S Decision Making Process.
The statement of financial performance is based on data relating to past transactions and events. Hence the statement of financial performance is of no use to an investor’s decision making process.
Discuss the above statement
The statement of financial performance is useful towards an investor’s decision making process as it contains a wealth of useful information regarding the performance of a business during a specific time period.
Using a statement of financial performance is an alternative way to measure profit. Many decisions are based on profit and risk and therefore significant in predicting future profits and getting feedback on decisions. With regular production of statements of financial performance managers are able to compare the performance against budget and identify any problems which they can deal with immediately. For example, David Jones was hoping its loss-making Foodchain group would break-even with its competitors (Woolworths and Coles Myer) the......
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