Evaluate the extent to which the statement of financial position Essay

Evaluate the extent to which the statement of financial position allows potential investors to assess the security of their intended investment and to determine the true net worth of the business - Essay Example Financial statement position of a company have measurable characteristic and easily evaluated (Financial Review, 2015, 1). Statement of financial position has essential skill at various occupations such as corporate finance, credit extension, commercial lending and investment management. Individuals engaging such activities should analyze data connection with investment decision. The financial statement should conquer with generally acceptance accounting principles (GAAP) (Wiley and sons, 2015, p4). The statement of financial performance should provide information on revenue, expenses, other profit measures such as gross profit and net profit (Financial Review, 2015, 1). The above worked example has clearly indicated all the information, which an investor requires to know before making a judgment relating to investment. The investor should compare personal security with the information shown and come up with the conclusion. The information to focus on includes the sales revenue, expenses, gross profit and net profit. This information shows the base line of company and indicates the least amount required for an investor to start the business. The investor can easily attain the amount shown on the statement of financial position above (Financial Review, 2015, 1)... In some cases, the amount represented on the statement of financial position has higher amount for investor to attain. In such cases, the investor should avoid risking the security available rather than look for an alternative. An investor who does not follow the instruction and engage in such risky securities asset investments might incur loses if not careful. One should make decision first after comparing financial statement with the personal securities before investing. The above illustration shows that the amount represented on the statement of financial position has easier way of attainment in the current