To help investors estimate the value of an entity � The management of an entity works for shareholders and makes decisions in order to increase the value of the company. � Value of a company ≠ values of its assets � values of its liabilities � When an investor purchases an entity (or its shares) he bases the decision on his forecast of the entity's long term capacity to generate profit. � DCF Model, Discounted dividend model, Synergies� � PnL approach more usefull to investors than balance sheet approach
