COMM 320 Lecture Notes - Lecture 8: Financial Statement, Pro Forma, Income Statement
7 Dec 2018
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Document Summary
Chapter 8 assessing a new venture"s financial strength and viability. Financial management: raising money and managing a company"s finances in a way that achieves the highest rate of return. Liquidity ability to meet short-term financial obligations. Efficiency how productively a firm uses its assets relative to its profits and revenue. Stability strength and vigor of overall financial posture. Financial statement: written report that quantitatively describes financial health. Forecasts: estimate of future expenses and income based on past performance, current circumstances, and future plans new ventures base forecasts on estimate of sales and industry average. Budgets: itemized forecasts of income, expenses, and capital needs. Statement of cash flows: preparation of forecasts. Expenses: capital expenditures, preparation of pro forma financial statements, ongoing analysis of financial results. Return on assets = net income/average total assets. Return on equity = net income/average shareholders" equity.
