Stakeholder perspectives AO4: Assess information to enable stakeholders to make decisions about the financial performance of an enterprise A stakeholder is any individual or group with an interest in the actions of the business. Draw a spider diagram to show stakeholders. Who are the stakeholders in your school or college? Stakeholder perspectives

Stakeholder perspectives In this topic you will learn about Information needed to take decisions by: Owners Managers Potential investors Suppliers

Stakeholders can also be classified as primary or secondary. A stakeholder is any individual or group with an interest in the actions of the business These can be: Internal i.e. from within the business External i.e. from outside of the business Stakeholders can also be classified as primary or secondary. Primary stakeholders have a direct relationship with the business whereas secondary stakeholders although affected by the actions of a business are not directly related to the business. Internal stakeholders External stakeholders Employees Managers Owners Customers Suppliers Shareholders Government Local community Society Creditors

Stakeholder perspectives Different stakeholders will want information to take decisions. Examples include: Owners Return on capital employed – is their investment generating returns? Activity ratios – are managers working effectively? Market trends – should the business invest in growth? Managers Profitability ratios and variance analysis – are expenses being managed? Activity ratios and cash flow – is the business solvent? Potential investors Income statement and statement of financial position to assess business performance Share prices and dividends paid Forecast market trends Suppliers Solvency and activity ratios especially trade payables payment period – should they offer credit? What is the degree of risk involved?

Activity Split the class into 4 groups to represent owners, managers, potential investors, suppliers Each group is to prepare a short presentation from their stakeholders perspective to cover: What are the stakeholders likely objectives? What decisions do the stakeholders make? How would they use: Published accounts of the business Published accounts of competitors Market trends Market and industry research?

Stakeholder perspectives In this topic you have learnt about Information needed to take decisions by: Owners Managers Potential investors Suppliers