- The systematic presentation and interpretation of financial information.
- Two type: managerial and financial
- There are three types:
- Balance sheet
- Income Statement
- Cask flow
A formal statement of the assets, liabilities, and equity for one day.
A formal statement of the Revenue, Cost of Operations, and expenses over a period of time
The formal statement of the sources and uses of cash from operations, investments,and financial activities over a period of time.
Cash Flow Statement
- Operations= doing our thing. This is usually defined by the name of the company. For example: Overnight auto service would have operations of autoservice . Cash effect on revenue and expenses in the Income statement
- Investment- Making cash on your own cash. Getting back a dividend.
- Financial -Using other people money or money that is borrowed.( e.f. like from the bank, the government, and family)
Valuable item owned by a business
Money that is owed.Claims of creditors on assets
Owners of the business . Included profit from operations and owners investment in the busines
Part of earnings given out to stockholders.
The accounting equation
Assets= liabilities + Equity
Equity is high and liabilities are low
Liabilities are high and Equity is low
- selling what you are in business to sell
- The money that is made from operations.
- Increase in equity from operations
Anything bought to be resold for profit
- Necessary cost of operations
- Decrease in equity from cost of operations
- Take homes pay:
- revenue minus expenses