RSM220H1 Chapter Notes - Chapter 4: Earnings Before Interest And Taxes, Retained Earnings, Cash Flow
Document Summary
Income statement the report that measures the success of a company"s operations for a specific time period. Business model consist of getting cash, investing it in resources, and then using these resources to generate profits. 3 types of activities: financing: obtaining cash funding, often by borrowing, issuing shores, or retaining profits. Also involve the repayment of debt and/or repurchase of shares. Investing: using the funding to buy assets and invest in people. Also include divestitures: operating: using the assets to earn profits. Companies are exposed to different levels of risk and are given different opportunities. Risk management involves identifying risks, deciding if and how to manage risks, and monitoring risk: techniques to manage risk: educating employees, buying insurance, and installing safety equipment. Risk/return trade off greater return when there is a greater risk. Make decisions about which opportunities to take and when.
