From the course: Finance for Non-Financial Managers

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Overview of the financial statements

Overview of the financial statements

From the course: Finance for Non-Financial Managers

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Overview of the financial statements

- We have talked about how accounting and finance involve compiling and using quantitative information in making decisions. How is that information conveyed? How do users see and digest that information? Well within a company, quantitative information can take on many shapes and sizes. There are no rules as to how information is used within a company. A company can use the information that it develops within a firm in whatever way helps that company to make the best decisions. But once you step outside of a firm, there are rules. Information used by potential investors and creditors is governed by rules so that information can be compared across time for the same company and across companies at the same point in time. Now we won't get bogged down in how those rules are created. Suffice it to say that there is a formal rule-making process to ensure that the information given by firms to those outside of the firm is…

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