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Evaluating the capital structure.
Assess risk and future cash flows.
Analyze the company’s: Solvency, and Chapter
5- 5 Liquidity, Financial flexibility. LO 1 Explain the uses and limitations of a balance sheet. Balance Sheet
Limitations of the Balance Sheet
Most assets and liabilities are reported at historical cost.
Use of judgments and estimates.
Many items of financial value are omitted. Chapter
5- 6 LO 1 Explain the uses and limitations of a balance sheet. Balance Sheet
Classification in the Balance Sheet
Three General Classifications Assets, Liabilities, and Stockholders’ Equity
Companies further divide these classifications: Chapter
5-7 Illustration 5-1 LO 2 Identify the major classifications of the balance sheet. Balance Sheet
Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer. Illustration 5-2 Chapter
5-8 LO 2 Identify the major classifications of the balanc...
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This document was uploaded on 02/08/2014.
- Spring '13
- Balance Sheet