RSM219H1 Chapter Notes - Chapter 1: Deferral, Share Capital, Retained Earnings
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RSM219H1 Full Course Notes
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Document Summary
There is a demand from stakeholders about company performance. *shareholders, regulators & government, bankers & creditors, management, employees, *most important stakeholders since they are owners of the company: equity is dependent on state of business. Regulators & government: taxes -make sure companies are not falsifying taxes, wealth in banks -provide an efficient method of carrying-out finances productively therefore promoting economic growth. Bankers & creditors: loans -ensure that one is financially capable of repaying a loan with interest (collateral) Management: bonuses -based on income derived from the success of the company. Financing activities: funding for the company (investors & owners) Money from investors (owners) & creditors (lenders) Cash outflow (money coming into the business) (money leaving the business: taking out loans. Investing activities: repaying loans, purchasing equipment/machinery, inventory (raw materials) Purchasing/selling property, plant, & equipment (ppe), securities (shares) of other companies. Cash inflow vs. cash outline: sale proceeds from ppe & securities, purchase of ppe & securities.
