HTA 602 Lecture Notes - Lecture 2: Financial Statement, Matching Principle, Capital Asset

• School: Ryerson University
• Department: Hospitality and Tourism Management
• Course: HTA 602
• Professor: Bernard Mc Evoy

Document Summary

Snapshot of the firm"s assets and liabilities at a given point in time. Assets are listed in order of liquidity: ease of conversion to cash, without significant loss of value. Statement of financial position identity: assets = liabilities + stockholders" equity. Current assets current liabilities the cash that will be paid out. Positive when the cash that will be received over the next 12 months exceeds. Ability to convert to cash quickly without a significant loss in value. Liquid firms are less likely to experience financial distress. However, liquid assets earn a lower return. The statement of financial position provides the book value of the assets, liabilities and equity. Market value is the price at which the assets, liabilities, or equity can actually be bought or sold. Market value and book value are often very different. Allows companies to use the historial cost method. You generally report revenues first and then deduct any expenses for the.