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The Financial Balance Sheet

Part II

This slideshow continues our review of the Financial Balance Sheet (FBS).

• The FBS is impacted by the economic and regulatory environments in which a firm operates.

The Financial Balance Sheet

• The government regulates markets, passes laws that may benefit or limit firms, and collects taxes on business income.

Government and the FBS

• A firm’s activity in product markets is reflected by its corporate assets on the LHS.

• A firm’s activity in financial markets represent how it acquired the RHS funds to finance its assets.

Markets and the FBS