Financial Accountancy (or Financial Accounting) is the branch of accounting concerned with the preparation of financial statements for outsider use. The accounting equation (Assets = Liabilities + Owners’ Equity) and financial statements are the main topics of financial accounting.
In the modern capitalist system, most governments require publicly-traded companies to issue a set of documents each year called financial statements or financial reports. This set most often consists of the “balance sheet”, the “income statement”, the “statement of retained earnings”, and the “statement of cash flows”, in addition to supplementary notes and management discussion. In the United States, publicly-traded companies are required to prepare based on generally accepted accounting principles.
Forensic accounting is the specialty practice area of accounting that describes engagements which result from real or anticipated litigation. Broadly speaking, these engagements fall into one of four categories: economic damages, family law, fraud and other forms of economic crime, and business valuation.
Free cash flow
Free cash flow measures a firm’s cash flow remaining after all expenditures required to maintain or expand the business, including interest payments as well as investments in assets used to maintain or expand the business (including but not limited to those described as “property, plant and equipment” or “PP&E”).