It helps to allocate funds, to understand how the money is working, and how far one is towards reaching the financial goals Hussain, et. The process of boot- strapping is the best way to start up business.
It helps the investors to see whether the company able to generate profits in comparison with the cash flow statement. For a sound decision making it is very important for the management to understand and determine the level of volumes that are required for the organisation to operate feasibly Atrill, The statement prepared which helps in making liquidity analysis helps in making estimate of nearby liquidity requirement and supply of liquidity in coming future Horngren, The breakeven level is the level of sales at which entity is able to cover all its costs and any sales made beyond that level shall help the organisation to earn profits.
They are only entitled to dividends on profits made by the company. It is required in both profit and non profit organisation.
Use of resources: Maximisation of profits can only be made in case where there is an optimum utilization of existing resources. Loan from bank The control dilution does not exist with bank as in there is charged interest over the funds provided by them.
In the ever changing world of business, effective management of human resources is key to business success.