Balance Sheet vs. Income Statement

User Generated

wfsvyre08

Business Finance

Description

an external investor's perspective, is a firm's income statement, balance sheet or statement of cash flows most important for determining a firm's overall financial health? Would your answer differ if you were an internal manager of the firm? Explain

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Explanation & Answer

As an external investor's perspective, balance sheet is most important for determining the firm's overall financial health. 

Being an internal manager of the firm, my answer will remain same because the balance sheet shows the total of assets and liabilities company owns. Although internal manager can access all the three statements, but only balance sheet depicts the firm's financial health


Anonymous
Very useful material for studying!

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