Module 1 notes

Module 1 notes - ACCT 6015 MODULE ONE NOTES Financial...

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ACCT 6015 MODULE ONE NOTES Financial accounting for MBAs Accounting is an INFORMATION SYSTEM made up of financial reports (called Financial Statements) and other information including footnotes to the financial statements, other things in the financial report, and news releases. All firms Plan Finance plans Invest in things And engage in operating activities How they do this, and whether they succeed, depends on both STRATEGY (how they choose to operate) and economic forces. Financial information allows users of acctg info to understand both what and how the firm is doing, and to make decisions regarding interactions with the firm. Who uses financial information? 1. Investors and potential investors—will the firm gain value over time? Will the firm pay dividends? 2. Investment analysts and other info intermediaries-to guide investment decisions 3. Managers- is the firm doing well? Will they get bonuses? 4. Employees—is this a viable place to work? 5. Creditors- can we expect to be repaid? Is the firm meeting debt covenants? 6. Suppliers- can we expect the firm to fulfill its contracts with us? 7. Customers—wil the firm be there when I have a long term contract or need customer support? 8. Government regulatory bodies- Is the firm following regulations? Do firms need more regulation and/or taxes? 9. Voters! –what policy decisions (economic, social, taxation, etc) do we need to make with respect to various firms? Who supplies the information? For publicly traded firms: The firm itself supplies both a 10-K and 10-Q to SEC and annual report to shareholders. These are public records (found on internet) and are AUDITED by an independent firm. For private firms, they prepare fin statements annually when necessary, and may or may not have them
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This note was uploaded on 03/02/2010 for the course ACCT 6015 taught by Professor Satin during the Fall '09 term at CSU East Bay.

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Module 1 notes - ACCT 6015 MODULE ONE NOTES Financial...

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