BMGT 340 Lecture Notes - Lecture 2: Tax Rate, Shares Outstanding, Accounts Payable
15 Sep 2016
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Chapter 2: introduction to financial statement analysis: firms" disclosure of financial information, regular financial records. Provide required info to outsiders: tell how a firm has done in the past. Investors, analysts, managers, creditors and other interested parties rely on financial statements to receive important information on a company. Detect theft, gross misuse of resources, measure and report earnings generate over the years accurately. Not to report market values: accounting is the language of business. Accounting is historical looking, but finance is future looking. It"s a snapshot of the firms assets and liabilities at a given point in time. A: assets are listed in order of decreasing liquidity (ease of conversion to cash without significant loss of value, balance sheet identity, assets = liabilities + stockholders equity. Shareholders are more willing to take on risk than bondholders: net working capital. Many firms today strives for 0 net working capital.
