Financial Accounting and Valuation are very different in nature. Financial accounts only look backwards to the...
Financial Accounting and Valuation are very different in nature. Financial accounts only look backwards to the past of the company while valuation models look forward to the future of the company. Agree? Disagree? Partially agree/disagree? Discuss.
Homework Answers
while preparing financial accounts, we work on the transactions happened or occured. we use financial accounts only for analysis of company past performance. Tools also use financial accounts as base for projecting future scope of the company.
So it conveys only past performance of company. While valuation models, use financial accounts as base and calculate future projected values. which helps investors in their decision making. like cash flow method.
Yes, I Agree, that Financial Accounting and Valuation are very different in nature.
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Financial Accounting and Valuation are very different in nature.
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