What Are Financial Statements Used For

Simply put, financial statements are used to make decisions. The types of decisions made and the analysis of financial statements can be challenging. While you, as a supply chain and logistics professional, may not perform financial analysis using financial statements, others will. Thus, your decisions today will affect their decisions tomorrow. 

Data are collected and compiled from the three principal business activities. The data are used by internal users to manage the company (managerial accounting) and by external users to make investment and credit decisions (financial accounting). 

Internal users need to understand the financial data to make informed decisions about the best use for funds. Management uses this information for decisions related to  

Finance— paying dividends, mix of debt and equity to fund operations, paying down debt early, and buying back stock. 

Human resources—paying competitive wages and wage increases, staffing levels, employee benefits, and implementation of new training programs. 

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