Key Business Terms Flashcards
What are Financial Statements?
They report a company’s financial performance.
Income Statement Equation
Revenue-Expenses= Net Profit
What do Income Statements show?
How much profit or loss a company generates over a certain period of time
What do balance sheets show?
A company’s financial position at a certain point of time “snapshot”
Balance sheet equation
Assets = Liabilities+Equity
What does the cash flow statement show?
A company’s sources and uses of cash as well as net change in cash for a given period
What is Revenue?
Sales
What are COGS?
Expenses related to the sale of each unit. aka Variable Costs
What is the last amount on the income statement?
Net Income aka Net Earnings
What is deducted of net income:
expenses, interest, and taxes
What is equity made of?
Common Stock and Retained Earnings aka. Owners Equity
When is an Emergency Loan given?
When a company runs out of cash.
