Financial Statements Flashcards
What are the 3 main financial statements?
Income Statement, Balance Sheet, Statement of Cash Flows
What does the Income Statement tell you?
How profitable the company is
What does the Balance Sheet tell you?
Breakdown of assets and liabilities
What does the Statement of Cash Flows tell you?
Where cash is coming from and going to
Balance Sheet equation
Assets = Liabilities + Equity
What is a Classified Balance Sheet
Distinguishes between current and long term assets
Assets
Cash, Accounts receivable, inventory, buildings
Liabilities
Accounts payable, mortgage payable, taxes payable, unearned revenue
Owner’s Equity
Capital Stock, retained earnings
In what order do you create a balance sheet?
Assets, then liabilities, then owner’s equity
What is net income/loss on the income statement
Revenue minus expenses
What is Gross Profit?
Gross Profit = Sales - Cost of Goods sold
3 categories in a Statement of Cash Flows
Operating, Financing, Investing
