The published financial statements on their own cannot provide all the relevant information needed but figures from the statements can be used to perform financial analyses. A long list of ratios can be worked to satisfy the information needs of investors. Profitability ratios such as return on capital employed and investment ratios such as EPS, price earning ratios, dividend yield and dividend cover are useful ratios to assist investors in decision making. However, these ratios are not without limitations as they are based on figures provided by financial statements that can sometimes be misleading.
Accounting concepts and conventions and the regulatory framework governing the preparation of published financial statements continues today to be of debate. Arguments for and against are many, as discussed above. However, these concepts and standards are not set in stone and improvements have been brought gradually from SSAPs to FRSs. In a view to set accounting practice free of bias and ambiguity and to bring qualitative characteristics to accounting information, other sources are taken in consideration. For example, the stock exchange requirements and generally accepted accounting practice. In addition, in recent years attempts have been made to develop a conceptual framework of accounting on which future accounting standards should be based. The aim is to reduce the potential number of accounting standards by placing emphasis on general principles rather than specific rules and to set guidance to apply accounting standards. The main objective is to satisfy all the information needs of users. It is worth noting that accounting is not an exact science and that a single set of financial statement though very resourceful in information, cannot fully satisfy all users.