Understanding the business
Sources of Financial resources:
- Potential return: dividends, higher future stock prices
- Potential return: Interest
Serves both external decision makers (stockholders/investors, creditors) and internal decision makers (owners, managers).
- This course focuses on the external decision makers.
- Next level course (managerial accounting) focuses on the internal decision makers.
- hiring, paying taxes, buy inventory etc.
- getting money (capital) to start the business etc
- paying dividends
- extra cash from the business can be used to buy long term assets (e.g. building, another company)