StudentShare solutions
Triangle menu

Financial Information - Essay Example

Nobody downloaded yet

Extract of sample
Financial Information

There are many evaluation methods followed and the most relevant of them are the evaluation based on the Economic Value Added (EVA) which is Net Operating Profit Minus Adjusted Taxes reduced by (Invested Capital*Cost of Capital). This method takes into account the opportunity costs of capital. EVA too suffers from the drawbacks as from accounting.
Another theory, Shareholder value theory suggests that through the interests of the stake holders, the shareholder value can be reaped. This is for ensuring return satisfaction to all the interested parties in the long run. The stakeholder theory aims at a collective interest of all stakeholders or sees the realization of their goals as the ultimate objective. Double value creation system is also followed where a company increases its customer value through its operations as well as creates its shareholder value through the sale of its produce. Thus, it could be noted that the company value could be increased only if both the shareholders and stakeholders interest are considered simultaneously while doing the performance evaluation.
Present Value of Abnormal Earnings (PVAE), which will b...
Present Value of Abnormal Earnings (PVAE), which will be available with the Present Value of Expected Dividends (PVED) and Abnormal Earnings based on Capital Employed, states the value in efficient markets as:
This results in the distortions or disparity between the MVE and the CSE (market value and book value) and the conditions for this are (i) Economic rents (unbiased accounting) (ii) Accounting distortions (Perfectly competitive equilibrium)

Thus, the information bearing upon the performance evaluation of a company helps in explaining the reason for the difference between the market value and the book value. Ideally, it could be inferred that the most important things to be considered in value creation processes are:
- The Performance evaluation should be able to provide information for proper decision-making and ensure feedback.
- The kind and nature of the information collected and the source from which the information is collected for valuations are therefore significant. The source, its nature, the methods used for valuation, the coherency, the adaptability with the strategic objectives etc serve as crucial indicators.

Discuss the relevance of financial information in the context of the valuation of internet stocks.

The main characteristics of internet stocks are that they are younger, fast-growing, riskier and larger when compared to the non-internet stocks. Nevertheless, the capital requirements of internet companies are very high. They need capital to establish the technological architecture, create a pool of customer base, and also have to spend a major portion on the sides of Research and Development, Marketing etc. On contrary, the ...Show more


The disparity between a firms market value and book value can cause cruicial effects. Normally, the value of a firms equity determined by the market should go in parity with the value from accounting records or book value. But practically, there may be evident disparities between market value and book value and this situation raises the questions of why these differences occur…
Author : tromprosetta
Financial Information essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Financial Information"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Financial Information for Business Decisions
This study aims at analyzing the business model of a multinational company which is also in the second position in Fortune 500 list. The company chosen for the study is Wal-Mart, which is regarded as the last retailer or supermarket chain globally. The study would be including an overview of Wal-Mart, further leading to an evaluation of its business model (CNN Money, 2012).
10 pages (2500 words) Essay
Essay on Financial Information
The four major financial statements are the income statement, balance sheet, statement of retained earnings, and the statement of cash flow (Weygandt, Kieso, Kimmel, 2002). All public companies are required by the Securities and Exchange Commission to include its financial statements within the content of the annual report.
3 pages (750 words) Essay
Qualitative Characteristics of Financial Information
Financial reporting conceptual framework is a coherent system of concepts which underlie the financial information reporting. The objective or purpose of financial reporting is to present the information pertaining to the reporting organization, which is useful to investors and other capital providers in making decisions.
8 pages (2000 words) Essay
Analysing Financial Information
rs of the business entity about its financial information. The financial reports prepared in accordance with the accounting procedures followed can be used both internally within the business entity as well as externally. The former is known as management accounting and the later as financial accounting or reporting.
4 pages (1000 words) Essay
Financial Information: Coursework Assignment
The company offers a huge range of products including food items, general merchandise, accessories, household items, and electrical products. In addition to its core business the company also provides financial services including insurance and retail banking.
5 pages (1250 words) Essay
The nature of financial information analysis

The paper tells that financial information is one of the most powerful sources of weight and Authority in any business society. This is particularly in environments where accounting is documented as a prime means of communicating and controlling the operations of an enterprise. Entrepreneurs have to deal with complex financial information environmental volatility as a base of operation.

6 pages (1500 words) Essay
Financial Information
Financial accounting information provides the basis on which managerial decision making is carried out. Hence, a company requires financial accounting data well before the management reports can be produced. However, the costing data and the related controls
2 pages (500 words) Essay
Financial information management
A portfolio can comprise of various assets like equity, options, futures, bonds, real estate etc. With growing globalization the portfolio can also include overseas security. This is done by investing in equities and other assets of a
10 pages (2500 words) Essay
Corporate Financial Information Analysis
A number of companies have gone bankrupt due to the vulnerable situation of the industry. Those who survived have opted for certain strategies to regain the shareholders’ confidence on their stocks. Some have paid off
18 pages (4500 words) Essay
Financial Information .Coursework Assignment
The company has also recently initiated its telecom and data manager and distributions business lines (Bloomberg 2012). The company sells its products and services through its physical stores
5 pages (1250 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us