Understanding of the information provided in the annual reports therefore not only offers an opportunity to the investors to assess as to how the company performed in the past but how it will perform in the future. Investors therefore need to critically identify the relevant information as well as how to use it in proper context.(Brealey & Myers, 2009)
What is also important to note that interpretation of the information depends upon the skills of the investors. What distinguishes a good investor from a bad investor is the ability of each investor to interpret the information presented in the annual report of the firm. Thus it is critical that the investors must clearly identify as to what type of information is essential for making a sound and rational decision.
Citi Pacific Limited is a Hong Kong based involving in the diversified business including infrastructure development, steel manufacturing, tunnels, power generations as well as the electricity. This paper will therefore discuss as to whether the information presented in the interim financial statements as on 30th June 2010 provide sufficient information to investors for making investment decision.
Investors are considered as the primary users of the financial statements and it becomes critical for them to properly evaluate the financial statements in order to make a rational decision. One of the main reasons as to why the investors must look into the information provided in the financial statements is to know about the profitability of the firm and assess as to whether the firm will remain profitable in the future. This sort of information will therefore serve as the key information for the investors to make a decision of whether to invest in a firm or not. (Atrill. & McLaney,2008).
Thus financial statements shall provide useful, timely and accurate information to the investors in such a manner that investors must be able to make reasonable