BU387 Lecture 4: Chapter 4 - Reporting Financial Performance
Document Summary
The basic business model identifies three activities: financing, obtaining cash funding. Investing: use of funding to buy assets and invest in people, operating, use of assets and people to generate profits. Quality of earnings refers to how solid earnings numbers are. Two main aspects to consider: content. Integrity of information: sustainability of earnings, presentation, earnings presentation is clear and concise, easy to use and understandable. Characteristics of high quality earnings: nature of content, unbiased and determined objectively, represents economic reality, presentation, does not disguise or mislead.
