Every strategic decision is a gamble that carries with it risks and opportunities that can affect the long-term sustainability of a news organization. Technological innovation has changed the economics of the publishing industry, affecting revenue, expenses and profits. Income statements, balance sheets, and cash flow statements provide insights into the current and future financial stability of a news organizations and its ability to thrive in the digital age. Therefore, it is imperative that successful media entrepreneurs have a deep and nuanced understanding of how every decision affects the bottom line and long-term sustainability. Here are the questions you’ll consider in this chapter:
- How do the underlying economics of a media enterprise flow through a company’s financial statements?
- What does the income statement tell us about past and current profitability?
- What are a company’s most valuable assets and most onerous liabilities?
- How does a company make and spend money?