學門類別
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Infosys: Assessing Earnings Quality - Primer
內容大綱
This primer accompanies W39421. It is designed to provide essential background information for students, and should be read prior to the case discussion.
學習目標
The examples in this primer provide students with a preview of the accrual method and the connection between profit and loss statements and cash flow statements. Preparing profit and loss statements using the accrual method recognizes income when earned and expenses when incurred. Preparing profit and loss statements using the cash method yields a cash flow statement. The difference between using the accrual or cash methods is the accrual effect, which is captured in the adjustments of the cash flow statement through working capital changes. The primer also serves as a refresher of the DuPont framework, which can help students understand the concept of DuPont analysis.