statement of comprehensive income Flashcards
What is the formula for gross profit?
sales revenue - cost of sales
What is the formula for sales revenue?
quantity sold x selling price
What is the formula for operating profit?
Gross profit - expenses
What is the formula for cost of goods sold?
opening inventory + purchases - closing inventory
what is the meaning depreciation?
A reduction of the value of an asset over time
What is the relevance of an income statement?
An income statement present a summary of a businesses revenues, gains, expenses, losses and net income/loss of an entity for a certain time period
What does SOFP stand for?
Statement of financial position
What is an SOFP?
An SOFP is a summary of everything the business owns and owes
What is a non-current asset?
A non-current asset is the assets the business owns and will own for a longer than a year
What are current assets?
current assets are items owned by a business whose value can fluctuate overtime
What is current liabilities?
current liability is debt owed by the business that should be paid back in under 12 months
What are net current assets?
net current assets is a figure that shows businesses how they are able to pay their short term debts
What is the formula for working capital formula?
Current assets - current liabilities
What are non-current liabilities?
debt that belongs to the business that is paid back over a long period of time (12+ months)
what is the formula for net assets?
non-current assets + current assets - (current liabilities + long term liabilities)
