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
