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In the world of investments, a company’s financial reports and statements are the holy grail to gain information about the company’s quantitative performance.
The 3 key components of financial statements that help investors make investment decisions:
- The Balance Sheet
- Income Statement; and
- Statement of Cash Flow
As an Accountancy undergraduate, I will be sharing 5 accountancy concepts I believe every Investor should know.
Before we begin…
Accounting is a very technical subject and there are 3 dimensions of financial reporting: Amount, Timing and Uncertainty, that the International Accounting Standards Board (IASB) balances when creating accounting rules and regulations. These regulations strive to make financial information fulfil the 2 fundamental accounting qualities of
relevance and
faithful representation.
Taking this into account, one of the most important rules in accounting is to follow the accrual basis of accounting (and not cash basis)....
