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

Hedge fund indices, Hedge Fund Indices Substantial increase in the use ...

Hedge Fund Indices Substantial increase in the use of Hedge Funds in recent times has created demand for appropriate indices that can offer a good tool to assess and benchmark

Value of conversion benefits, Having seen the measure used for ...

Having seen the measure used for analyzing the convertible bonds, let us now examine the merits and demerits of convertible bonds, and why or wh

What is usual approach of capital structure, Q. What is usual Approach of c...

Q. What is usual Approach of capital Structure? Ans. Traditional Approach: - The traditional approach establishes middle among the Net Income approach and the Net Operating Inc

Define some of government need imposed on public corporation, What are some...

What are some of the government needs imposed on a public corporation that are not imposed on a private, closely held corporation? Public corporations should submit audited finan

Three-phase source voltages and phase sequence, Q. Three-phase source volta...

Q. Three-phase source voltages and phase sequence? The elementary three-phase, two-pole generator shown in Figure has three identical stator coils (aa, bb, and cc) of one or

Pvif, how do we get the pvif of a perpetuity

how do we get the pvif of a perpetuity

Leverage, ABC Ltd. Produces electronic components with a selling price per ...

ABC Ltd. Produces electronic components with a selling price per of Rs.100. Fixed cost amount to Rs.2,00,000/- 5000 units are produced and sold each year. Annua

Find the impact of price and trading volume, Purpose of research: The a...

Purpose of research: The aims of this research are to examine the effectiveness of speculation on efficiency of Petrochemical sector in Saudi Arabia financial market"TADAWUL".

Buy down loans, The buy down loan is similar to the PAM; however, it ...

The buy down loan is similar to the PAM; however, it is the seller of the property and not the buyer/borrower who places cash in a segregated account so that additional

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