Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
3rd Edition
ISBN: 9780133507676
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 2, Problem 9CC
Summary Introduction

Financial Statements:

Financial statements are the accounting reports of any organization that are prepared with a purpose to disclose its past performance and also the assets and liabilities of the company along with the finances. These statements are prepared either on an annual basis or on a quarterly basis.

Balance Sheet

The balance sheet represents the financial position of a company for a particular time period. It is a very important part of the financial statement that shows what the company presently owns and how much liability do they have. The balance sheet basically has three broad headings of its contents namely, liability, asset and the shareholder’s equity. The formula of the balance sheet is written as under:

Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance), Chapter 2, Problem 9CC

Off − Balance Sheet Transactions

Off- balance sheet transactions are those arrangements or transactions that might have a material impact on the future performance of the firm but as a matter of fact they do not appear on the balance sheet of the company.

To Identify:

Where does the off − balance sheet transactions appear in a firm’s financial statements.

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