Relevant Stakeholders And The Role They Play In The Success Of Business As Per The Financial Statements. (Essay Sample)

Finance
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Finance
Corporations are big business entities established for the purpose of making profits. The profitability of such businesses depends upon the role played by various stakeholders. There are some goals that corporations should focus on other that the maximization of wealth. These include such goals as corporate responsibility and the need to improve the standards of living to the entire society. This assignment tends to give a thoughtful analysis of relevant stakeholders and the role they play in the success of business as per the financial statements.
Some of the most significant stakeholders in an organization are the shareholders and the customers. Additionally, employees play the biggest role in the overall success of a business corporation. An organization depends upon employees in working for the organization. It is the accountability of the organization to engage its employees in solving problems and performing "evangelical" work on behalf of the company (Kotas, 2014).
It is crucial for the firm to maximize the wealth of shareholders. This is because shareholders wealth are the determinants of earnings per share (EPS). The rule of wealth maximization should be followed compared to the rule for profit maximization. Profit maximization is not an overall goal of the firm (Shamsher, Ariff & Taufiq, 2008).
A business corporation composes of many stakeholders. These includes customers, creditors, employees, competitors, suppliers, social activists, environmental agencies, governmental entities, among others. Customers are the source of revenues as represented in the income statement (Dechow, Myers & Shakespeare, 2010). Creditors are the source of business funding and are described in the statement of comprehensive income (balance sheet). Government entities are concerned with taxation and are represented on the balance sheet. Employees are entitled to salaries and wages, and these are represented by the profit and loss (P&L) statement. Suppliers are the source of raw materials and are described by the income statement (Ariff, Taufiq & Shamsher, 2008).
It can be argued that stakeholder theory is a huge consideration for the success of the business. All these stakeholders are crucial, an...