The Major Financial Statements . The statement of cash flows Table A statement showing a firm's cash receipts and cash payments generated by the firms operations, t./f investments and financial activities during a specified perio Accrual method of accounting v.s. Transaction basic method It provides evidence on the well-being of a firm
The Major Financial Statements ❖ The statement of cash flows – Table – A statement showing a firm’s cash receipts and cash payments generated by the firm’s operations, investments and financial activities during a specified period. – Accrual method of accounting v.s. Transaction basic method – It provides evidence on the well-being of a firm
Return On Equity ( ROE) . Past roe v.s. Future roe ROE is one of the two basic factors in deter-mining a firm's growth rate of earnings A high ROE in the past does not necessarily imply a firms future roe will be high A declining ROE is evidence that the firms new investments have offer a lower ROE than its past investment It is expectations of future dividends and earnings that determine the intrinsic value of a company's stock
Return On Equity (ROE) ❖ Past ROE v.s. Future ROE – ROE is one of the two basic factors in deter-mining a firm’s growth rate of earnings. • A high ROE in the past does not necessarily imply a firm’s future ROE will be high. • A declining ROE is evidence that the firm’s new investments have offer a lower ROE than its past investment. • It is expectations of future dividends and earnings that determine the intrinsic value of a company’s stock