Healthcare financial management Discussion Healthcare financial management Discussion Many consider the earnings or net income to be the single most important item in the financial statements. Earnings indicate the extent to which a company has engaged in value-added activities. In for-profit organizations, they are a signal that helps direct resource allocations in capital markets. In fact, the theoretical value of a for-profit company’s stock is the present value of its future earnings. Increased earnings represent an increase in company value, while decreased earnings signal a decrease in that value. The definition of earnings management is the “reasonable and legal management
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