Financial stuff

Question 1

What’s the purpose of the balance sheet?

Answer 1

Shows what the company owns (assets) and owes (liabilities)

Snapshot of company at point in time, usually last day of financial year

Question 2

What do the profit and loss accounts show for a given period?

What else might it be called?

Answer 2

How much money has been received (profit)

How much has been spent (loss)

Usually over the financial year

Income and expenditure account

Question 3

What is the cash flow statement?

Answer 3

Basically ties together P&L account and Balance sheet

Usually shows incomes and expenditures in 3 categories:

Cash from Operating Activities

Cash from Investment Activities

Cash from Financing Activities

Question 4

what is the purpose of a budget?

Answer 4

forward projection of profit and loss account, including planned stuff

Question 5

What is a cash flow forecast?

Answer 5

Forward projection of cash needs, to predict borrowing requirements

Question 6

What does a budget show?

Answer 6

Financial plan showing:

Expected income

Expected expenditure

OVer a specific period