Final answer:
Internal users are more likely to ask questions regarding employee compensation, borrowing decisions, production costs, and product emphasis. External users are interested in the company's profitability and ability to pay debts.
Step-by-step explanation:
a. Can we afford to give our employees a pay raise? - This question is more likely asked by an internal user of financial statements. Internal users such as management and employees are concerned with the financial health of the company and the impact on employee compensation.
b. Did the company earn a satisfactory income? - This question can be asked by both internal and external users of financial statements. Internal users, such as management, want to know if the company is financially stable, while external users, such as investors, lenders, and potential partners, are interested in the company's profitability.
c. Do we need to borrow in the near future? - This question is more likely asked by an internal user of financial statements. Internal users, such as management, are responsible for making financial decisions for the company, including determining the need for borrowing.
d. How does the company's profitability compare to other companies? - This question can be asked by both internal and external users of financial statements. Internal users, like management, may want to benchmark the company's profitability against industry peers, while external users, such as investors and analysts, use this information to evaluate the company's performance.
e. What does it cost us to manufacture each unit produced? - This question is more likely asked by an internal user of financial statements. Internal users, such as management, need this information to assess the cost effectiveness of the company's production process.
f. Which product should we emphasize? - This question is more likely asked by an internal user of financial statements. Internal users, such as management, are responsible for strategic decisions regarding the company's product offerings and market focus.
g. Will the company be able to pay its short-term debts? - This question can be asked by both internal and external users of financial statements. Internal users, like management, are concerned with the company's liquidity and ability to meet its financial obligations, while external users, such as lenders and suppliers, need assurance that the company can fulfill its short-term obligations.