Management and Organizational Studies 1023A/B Lecture Notes - Lecture 2: Double Taxation, Operating Cash Flow, Canada Revenue Agency

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 1023A/B
• Professor: Christina Maco

Document Summary

Statement of financial position: balance sheet, assets (what they own), liabilities (what they owe) and equity (the difference between owing and owning) International financial reporting standards (ifrs: allows some flexibility on how statement is presented, assets, fixed assets or capital assets (tangible or intangible, current asset (less than 1 year) Liabilities: current liabilities (less than 1 year, long-term liabilities (bond and bondholders, shareholder"s equity. Net working capital: difference between firms current assets and current liabilities, usually positive in a healthy firm, current ratio. Liquid assets are usually less profitable to hold (ex. cash is fully liquid, but doesn"t earn any return. Debt vs equity: creditors have first claim of firm"s cash, equity holders only get residual value (portion left over, use of debt in a firm"s capital structure is called financial leverage, more debt, greater degree of financial leveragee. Increases the potential reward to shareholders, increases potential for financial distress and business failure.