Shareholders Value Essay Example | Topics and Well Written Essays - 1500 words

Sh arholders Value - Essay ExampleThe entries are counterbalanced so that the assets always equal the liabilities and owners equity. The balance sheets of the company are examined by shareholders.The fundamental article of beliefs of economics are optimization and marketplace equilibrium. The optimization principle says that people choose the best consumption patterns that they can afford. The market equilibrium principle states that prices adjust till demand equals add. A supply curve measures how much of a good bequeath be supplied at a given price. Suppose we reach a price p for the supply of a quantity x. The producer would be willing to supply a smaller amount at a lower price. However the entire quantity is sold at the price p. The producers surplus measures the gains to the trustworthy by selling all the goods at the higher price p. The idea of surplus enables us to nail down the gains and losses for the firm. The consumers surplus is the difference between the gross b enefit of consuming the good and the price give for that good. This perspective lets us understand the firm from economics theory. The concept of producers surplus is closely linked to the concept of profit.9. The accounting approach does non measure the large gaps between the true value of the firm and the discovered market value. The economics perspective considers all the variables that influence the market till we find a compare between the actual and the calculated market values of a firm.10. Shareholders in a firm confide on accounting practices more that economic calculations because accounting poesy are easily available for analysis.11. each accounting decision has an economic consequence while the changes in the economic picture are not necessarily reflected in accounting.12. term accounting is a simple process based on conventions and numbers available with the firm, economic considerations are very complex and involve many variables. The values of economic variabl es are not readily available and are many times external to the firm.13. While accounting is by nature a short term activity, economic analysis is a long term activity.14. news report has methods in place for auditing the firm. Economic methods do not have established audit procedures in place.15. While accounting