How to calculate the net income of a year, Financial Management

Assignment Help:

Is the net income of a year the money the company made that particular year or is it a number whose significance is quite doubtful?

The net income of a year is not money that accumulates in the safe. Thus, it is not "money" the company earned. On the other hand, it is one of the possible numbers (with the flexibility that accountancy provides) a company might have shown. Fernandez states that, generally, cash flow is more useful than net income: reported net income can be presented in several ways (it is just an opinion) while equity cash flow or free cash flow is a fact: a unique number. There is a financial maxim which, although it is not completely true, may be convenient to remember: "net income is just an opinion, while cash flow is a fact."

 


Related Discussions:- How to calculate the net income of a year

What do you signify by receivables management, Q. What do you signify by Re...

Q. What do you signify by Receivables Management? Ans. Receivable Management: - The term receivables refer to debt outstanding to the firm by the customers resulting from sale

Explain to tr, TR has recently been promoted to his first management positi...

TR has recently been promoted to his first management position. In the past, he very much enjoyed working as part of a team, but is having some difficulty in adapting to his new ro

Uses of index numbers, Uses of Index Numbers 1. Establishes trends ...

Uses of Index Numbers 1. Establishes trends Index numbers when analyzed reveal a general trend of the phenomenon under study. The available figures for inflation based

Define the types of shareholder, Tactics can be used by company to protect...

Tactics can be used by company to protect itself. Before the bid Types of Shareholder Having the right shareholders on board who can be

Forward start option and a chooser option, When a company commits (implicit...

When a company commits (implicitly or explicitly) to granting at-the-money options to employees in the future then we can view them as a forward start options. a) Explain the di

Difference between a parallel loan and back to back loan, Describe the diff...

Describe the difference between a parallel loan and a back-to-back loan. Answer:  A parallel loan contains four parties.  One MNC (multinational company) borrows and re-lends to

What is gatt, What is GATT, and what is its goal? GATT is the General A...

What is GATT, and what is its goal? GATT is the General Agreement on Tariffs and Trade it is a agreement that seeks to decrease trade barriers among participant nations.

Types of frns, Types of FRNs In an era of innovations, while changing n...

Types of FRNs In an era of innovations, while changing needs and preferences of the investors trigger introduction of newer FRNs, the borrowers' funding specifications also nec

International bonds, International bonds are divided into two c...

International bonds are divided into two categories namely, foreign bonds and euro bonds. Foreign bonds are issued by a borrowing company in another

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd