This information is then used to make important business decisions. For example, knowing what profit has been made can help a business to decide how much money to retain and whether or not to pay out dividends to shareholders.
Stakeholders The financial position of a business is also of interest to its stakeholders.
• Shareholders will be interested as they receive a share of any profits in the form of a dividend.
• Employees will be interested as they may receive a percentage of profits as a reward. Also, if the business is performing well, employees are more likely to feel secure in their jobs.
• Suppliers will be interested as they want to be sure that the business has the ability to pay any debts owed to them for credit purchases.
• The government will be interested to ensure that the proper taxes are being paid.
• Financial institutions will be interested as loan approval is based on a business’s performance.
• The local community will be interested as a business that is performing well will have a positive impact on the area in terms of investment, sponsorship and employment.
Sportify stakeholders A
Go to page 200 of your Activities and Accounts Book to identify stakeholders with a financial interest in Sportify PLC.
