Financial Statement Analysis

Question 1

Income Statement (Statement of earnings/Statement of operation)

Answer 1

gives an overview of how much revenue the company brings in how much it pays out as various expenses, and how much profit is left over if any

Question 2

Net Sales

Answer 2

Sales (-) return.

Question 3

Operating income or Earnings Before Interest and Taxes (EBIT)

Answer 3

Expenses of running the company (production, marketing, research and development, administration) (-) Net Sales

Question 4

Net income

Answer 4

EBIT (-) interest (-) corporate income tax

Question 5

Statement of cash flow

Answer 5

Investors use this to see whether the company is bringing in more cash than its spending.

Question 6

Balance sheet

Answer 6

Snapshot of a companies assets, liabilities, and equity

Question 7

Assets

Answer 7

Anything the company owns

Question 8

Liabilities

Answer 8

Anything the company owes to other parties

Question 9

Equity

Answer 9

Difference between assets and liabilities. Equity tells us what a company is worth