MT1 Slides Flashcards
What are the three lines that come after other income/expenses; gains and losses on the income statement
Income from continuous operations, before tax
Income tax expense
Income from continuous operations, after tax
What are the categories that come after Income from continuous operations, after tax
Discontinued operations
Net income
Other comprehensive income items
Comprehensive income
Earnings per share
What are the column headings in the statement of changes in equity in order
-share capital (can be separated from common and preferred)
-contributed surplus
-retained earnings
-AOCI
-Total
What are the row headings in the statement of changes in equity in order
-Beginning balance
-Net income
-OCI
-Dividends
-Shares issued
-Ending balance
What is the EPS Formula
EPS= (Net income- Preferred Dividends) / WA Common shares outstanding
What are the three sections in the statement of cash flows and describe the changes that occur in them
Operating activates, changes in working capital, income statement items
Investing, changes in non-current assets
Financing, changes in non-current liabilities and share capital
What is the cash flow equation
Change in cash= Change in L + Change in E - Change in non cash assets
Financial liquidity ratio
Net cash provided by operating activities/
Average current liabilities
Financial flexibility ratio
Net cash provided by operating activities/
Average total liabilities
Free cash flow formula
Net cash provided by operating activities
Less: Capital expenditures
Less: Dividends
=Free cash flow
What is a leverage ratio
Debt Equity ratio= Total liability/ Equity
What is a liquidity ratio
Current ratio = Current assets/ Current liabilities
What is a solvency ratio
Debt to asset ratio = Total Liabilities/ Total assets
Calculate cash from customers
sales + A/R1-A/R2-Bad debt expense-Unearned Rev1 + Unearned rev2
Cash paid to suppliers
-Cogs+inv1+inv2-A/P1+A/P2
What are the general rules surrounding the statement of cash flows
add last years, subtract this years assets
subtract last years, add this years liabilities
What are the five steps to approaching revenue recognition
- identify the contract with the customer
- Identify the sperate performance obligations
- determine the transaction price
- allocate the transaction price to performance obligations in the contract
5.recognize revenue when each performance obligation is satisfied
What are the four things that effect the Construction in progress T-Account
DR. Costs and revenue
CR. Billings and expenses
Costs and expenses usually cancel out
