RSM100Y1 Lecture Notes - Lecture 8: Tim Hortons, Competitive Advantage, Accounts Payable
Document Summary
Reliability is using a source to find a value. Relevance is used to guess value of a an unfamiliar good. The point when the product exchanges hands. The period in which you benefit from the expense. The balance statement shows what you have, your income statement shows your expense next year if you sell them next year, the period of benefit, after this your expenses are shown. Causes for differences between net income and cash flow. Accrued interest- money that people owe you, income shown even though no cash is exchanged. Make your company more attractive to investors. Possible: pre mature profit recognition, delaying expenses, overstate your accounts payable. Most companies would understate their accounts payable, minimize income for taxes. Iphone sales are decreasing, 80% of their revenue comes from iphones. Investors would be asking why they just had a huge positive quarter and now their on a large decline. Develop products that will create demand elsewhere.