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Topic: Miscellaneous
Number of pages / Number of words: 4 / 1033
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The balance sheet is just one key statement used in considering the purchasing a private business. It is the theoretical value of the enterprise if buyers were to purchase it, liquidate the assets and shut its doors. The liquidation value is not the same as the true value of a business, which is how much cash it can generate for business owners in the future...


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The liquidation value is not the same as the true value of a business, which is how much cash it can generate for business owners in the future. So the balance sheet is limited in its use for making an investment decision (about.com, 2007).

The final financial statement, the statement of cash flows emphasizes the critical nature of cash flow to the operation of the firm (Block & Hirt, 2004)...


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