There Are Three Different Categories of People Who Read Financial Statements, Investors, Financial Analysts, and Creditors

There are three different categories of people who read financial statements, investors, financial analysts, and creditors. Choose one category and provide examples of the types of information the person would be interested in. Explain why each type of information may be important to the person.

I selected investors as my category because I would like to become an investor in real estate in the near future. Investors are typically interested in knowing the soundness and the position of their investments. Commonly, an investor would analyze the financial performance of its investment; in researching the topic venture capitalists comes to mind. A venture capitalist examines potential investments with high returns as well as strong exiting opportunities. An investor also wants to know whether there are signs of growth within an investment and if issuing shares would stimulate growth. Investors will evaluate revenue, acquisition cost, turnover rates, and current assets make sure that there is enough capital to protect short-term as well as current liabilities (Newlands, 2014).

Investors would also analyze the background and experience in the opportunities their investing money because investors do not want their financiers to make mistakes with its investment capital. Investors normally seek experienced management groups or entrepreneurs with a high-performance track record (Newlands, 2014). Also, they are interested in enterprise individuality, whether the investment has a unique line; many times the financiers’ have to prove to its investors, that their market potential is vast enough for a worthwhile investment. Moreover, investors are not like venture capitalists’ that is subjective to merchandise characteristics, investors seek what distinguish your merchandise from potential competitors which will give a competitive advantage. Other attributes that investors are interested in are the business model; they would like to know if it is effective by strategic value (Newlands, 2014). A business model represents a financiers’ firm it can be analyzed to see if it helps the firm to become more profitable; investors seek attributes in a business model that gives a pitch to them ensuring them that there is a profit to be made. As an investor, you would be focusing on the market and financial concerns, the perpetual, as well as a vast consumer base brand, will give you a highly-flavored competitive advantage that will impact to its target market (Newlands, 2014).

Investors seek firms’ that cultivate swiftly, as well as having a sufficient financial projection that generates substantial profits and various sources of revenue. Investors are interested in the earnings and revenue growth they want to know the firms' bottom line; it illustrates the firms’ path, detailing growth or a deterioration in profits. The strategic factor that enables investors to determine the worth of a firm is its cash flow, earnings, and liabilities,