Audit Report Findings

Audit Report Findings for Best Buy

Stakeholders are actors where internal or external or economic and social partners of the firm. The activity of the company has a direct or indirect impact on these players and these players have a more or less on the company. These are complex networks of influence, relationships, partnerships, power, and interdependence. A certain extent, the company depends on each of its stakeholders for its survival, and vice versa. The stakeholders that are interested in the information provided in the annual report of Best Buy are their customers, suppliers, lenders (banks and shareholders), employees. These are internal stakeholders whereas, external stakeholders such as residents of neighboring areas to business or interest groups (Edwards D., 1998).

They are interested in the financial health of the company as being part of the company, company every action small or big directly affects and influences their relationship. Furthermore, financial statements are an image of a financial health of the Best Buy. The financial statement used by the external investors in order to see how well a business is doing and performing and whether it is profitable to invest in this company for future growth and profit. The look for the following information in the financial statement:

Profitability: The internal and external stakeholder looked for the profiba6tilbity of the company as that indicates a pure structure of the Best Buy sales, COGS and expenses. According to the general accounting standard, COSG should be 75% or less of gross sales expenses, 20% or less the income, 5% of gross sales. This approach is used by the entire stakeholders so that the companies are not overpaying for COGS and other expenses listed in the income statement. The review of tax trend in also important in order to see whether sales or expenses are rising or falling over the previous periods.

Balance: This part is very essential to be review by the stakeholders as it demonstrates the worth of the company. However, the availability of high inventory indicates slow sales or obsolete assets still owned, moreover large amounts of reforestation company indicates slow collections by the company, stopping the flow of cash. This might have a negative impact on the company reputation from the stakeholders' perspective.

Cash flows: The most important thing seen by the stakeholder especially the suppliers and the bank, investors, sponsors and other people associated with it are the inflows and outflows of ...