BU127 Chapter Notes - Chapter 2: Investment, Management Consulting, Accounting Equation
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BU127 Full Course Notes
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Bu127- chapter 2: investing and financial decisions and the statement of financial. Company"s financial performance reported in its audited financial statements help users understand how well company has implemented its strategy in the past and to evaluate future growth potential. Financial statements used to communicate economic facts, measured in monetary units, in a standardized, formal way. By applying accounting principles consistently, accountants formally communicate comparable estimates that faithfully represent important economic fact about companies and competitors. To provide useful economic info about a business to help external parties, primarily investors and creditors, make financial decisions in capacity as capital providers. Users of accounting info = decision makers: include average investors, creditors, and experts who provide financial advice. Financial reports must enable decision makers not only to assess the amounts, timing, and uncertainty of future cash inflows and outflows, but to understand financial value of both the assets owned and claims against assets (l & she)
