The Accounting Review Vol. 29 No. 1 1954
A STUDY ON NET WORTH COMPARISON.
Abstract
The study of this article purports to show how the annual report of a company can be analyzed in order to determine the sources of additions to net worth and the disposition of these additions in a general way. It is necessary that the company will include in its annual report a comparative balance sheet and statement showing changes in retained earnings or surplus, either contained as a part of the balance sheet or as a separate statement. The principle of accounting for the change in net worth to show the income increments over a period of time is used as a basis for analyzing the annual reports. This study departs from the idea of attempting to determine the source and application of funds or the change in net working capital, as it is assumed that these statements require access to accounting records of the firm for the purpose of analyzing changes in depreciation reserves and adjustments to surplus. Furthermore, as the size of the firm increases, the individual stockholder becomes more and more discouraged in trying to understand the annual reports.
- DOI
- 10.2308/tar-7129492
- Volume
- 29
- Issue
- 1
- Pages
- 114-120
- Language
- en
- Sources
- openalex crossref