Which stakeholders primarily use financial statements to gauge corporate performance over time?

Financial statements serve as crucial tools for stakeholders to assess a company's performance over time, and investors and creditors are among the primary users of this information. Investors utilize financial statements to make informed decisions about buying, holding, or selling shares in the company. They analyze metrics such as revenue growth, profitability, and return on equity to evaluate the potential for future returns on their investment.

Creditors, on the other hand, examine financial statements to assess the risk of lending money or extending credit to the business. They look for indicators of a company's financial health, such as cash flow, debt levels, and overall solvency, to ensure that the company can meet its financial obligations.

These stakeholders are focused on understanding how well the company is performing financially and its ability to generate returns or repay debts, thereby making financial statements essential in their decision-making processes. This focus on financial viability and performance metrics illustrates why investors and creditors are the primary users of financial statements in evaluating corporate performance.