Question

In: Accounting

Do you think investors need to be concerned with financial income, taxable income, neither, or both?​

Do you think investors need to be concerned with financial income, taxable income, neither, or both?​

Solutions

Expert Solution

Investments are made in order to earn Income by way of Capital Gains and Dividend.

From Investors point of view, the most important factor is Revenue and Financial Income accruing to any Company in which Investment is made. It is only with increase in Revenue and Financial Income that a Company will have Increased Net Worth and as a result, Capital Gains would accrue to the Investors.

Also through higher Financial Income, the company would be in position to pay Dividends from the Earnings Per Share.

On the other hand, taxable Income is derived after making certain Addition/Subtraction in the Financial Income. Variation may occur due to Differences in accounting and taxation laws of any country.

However it is pertinent to note that are synonymous to each other incase there are not major differences.

CONCLUSION: Hence, Investor is primarily more concerned with the Financial Income, but at the same time Taxable Income is also to be kept in mind before taking Investment decisions.

ekkarill92 answered 2 years ago
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