From the course: Financial Accounting Part 2

Unlock the full course today

Join today to access over 23,200 courses taught by industry experts.

The intersection of accounting and finance

The intersection of accounting and finance

From the course: Financial Accounting Part 2

Start my 1-month free trial Buy for my team

The intersection of accounting and finance

“

- Business valuation brings together the fields of accounting and finance. From accounting, we obtain data that are important inputs into many valuation models. These data include net income, sales and cash flows. - From finance, we draw from the concepts of risk returns and the time value of money. - Now, business valuation is not an exact science. - Lots of things can go wrong. - For example, sometimes data are hidden or distorted. Other times data are badly misinterpreted. Finally, it is often the case that the future just doesn't turn out according to the forecast. - Let's look at a couple of famous examples of business valuation problems. - A valuation misadventure arose in the acquisition of Autonomy by Hewlett-Packard or HP. HP is a hardware and software company based in Palo Alto, California. - In October 2011, HP purchased Autonomy, an Enterprise software company founded in Cambridge, England.…

Contents