TAILIEUCHUNG - The Fast Forward MBA in Finance_5

Tham khảo tài liệu 'the fast forward mba in finance_5', kinh doanh - tiếp thị, quản trị kinh doanh phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | ASSETS AND SOURCES OF CAPITAL Figure displays lines of connection or tether CONCEPT lines from sales revenue and expenses in the income statement to their corresponding assets and operating liabilities in the balance sheet. These lines are not actually shown in financial reports of course. I include them in Figure to stress that the profit-making activities of a business drive a good part of its balance sheet. Also you might note the line from net income to owners equity net income increases the owners equity. All or part of annual net income may be distributed in cash to its shareowners which is recorded as a decrease in the business s owners equity. END POINT A business needs assets to make profit. Therefore a business must raise capital for the money to invest in its assets. The seed capital comes from shareowners they may invest additional money in the business from time to time after the business gets off the ground. Most businesses borrow money on the basis of interest-bearing debt instruments such as notes payable. Profitable businesses retain part or all of their annual earnings to supplement the money invested in the business by their shareowners. The balance sheet or statement of financial condition reports the debt and equity capital sources of a business and the assets in which the business has invested. Several different types of assets are listed in the balance sheet. The balance sheet also reports the operating liabilities of a business that are generated by its profit-making activities and not from borrowing money. Operating liabilities are non-interest-bearing payables of a business which are quite different from its interest-bearing debt obligations. The relationships of sales revenue and expenses reported in a company s income statement to the assets and operating liabilities reported in its balance sheet are not haphazard. Far from it Sales revenue and the different expenses in the income statement match up with particular assets and .

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