How_Money_Works_-_The_Facts_Visually_Explained
18 19 1999 Euro Twelve EU countries joined together and replaced their national currencies with the Euro. Bank notes and coins w ...
How it works With the massive expansion of trade that accompanied the discovery of the Americas and the growth of nation states ...
20 21 MONEY BASICS The evolution of money “By pursuing his own interests, he frequently promotes that of the society more effect ...
$ Economic theories and money Since the birth of modern economic thought, economists have tried to work out how the quantity of ...
22 23 Interest rates cut to 0.25% Interest rates raised to 1% MONEY BASICS The evolution of money Scholars in the early 16th cen ...
$ € $ $ $ $ $ $ $ $ $ $ % $ US_024-025_OPENER_CH2.indd 24 13/10/2016 16:15 ...
P RO F I T- MAKING AND FINANCIAL INSTITUTIONS ❯ Corporate accounting ❯ Financial instruments ❯ Financial markets ❯ Financial ins ...
$ $ $ Corporate accounting Companies use money in different ways—some borrow to pay for investment to grow bigger, while others ...
26 27 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Corporate accounting Depreciation This is a measure of how much the value of an a ...
TOTAL REVENUE $100,000 How it works If businesses were simply to report the money they had earned, this would give an unrealisti ...
2928 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Corporate accounting INFLATING EARNINGS Some companies omit certain expenses from ...
Expensing vs capitalizing Capitalizing and expensing in practice All companies have costs and expenses. Some such as electricity ...
30 31 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Corporate accounting How it works Business owners and managers have a choice. The ...
Depreciation, amortization, depletion The cost of a company’s assets and its use of natural resources can be deducted from its i ...
32 33 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Corporate accounting How it works Depreciation is used to calculate the declining ...
Smoothing earnings How it works Investors like to see companies demonstrate a steady increase in income and profits over time, r ...
34 35 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Corporate accounting Figures are managed Income is higher than usual, so the extr ...
Cash flow The money coming into and going out of a business is called cash flow. Inflows arise from financing, operations, and i ...
36 37 PROFIT-MAKING AND FINANCIAL INSTITUTIONS Corporate accounting How it works Cash flow is the movement of cash into and out ...
CASH FLOW Positive cash flow Cash flowing into the business is greater than cash flowing out. The stock, or reserve of cash, inc ...
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