26100 Lecture Notes - Lecture 12: Retained Earnings, Cash Flow, Financial Statement
Document Summary
Change in shareholder wealth (change in market capitalisation of the firm) Employees whether the company can afford to pay wages. Lenders, suppliers will the business pay its debts. Such as sustainability reports not regulated, new type. Accounting reports: balance sheet, assets = liabilities + owners equity, profit & loss statement (a. k. a. Popularly used, and commonly understood (the language of business) You care about them when you actually own/manage your own business (or are responsible for a venture). If it(cid:859)s all about money, then the financial statements will give you the (cid:862)big picture(cid:863). Value cannot be captured only financially there are intangible assets that cannot be reported in the financial statements- but it can be considered goodwill but u dont know what they are them. Financial numbers can be manipulated (not ethically where businesses do it to make their business look better e. g. adding fake assets)
