Weeks 3-4 Flashcards
3 statements
- Finacial Position (Balance Sheet)
- Comprehensive Income (Income statement)
- Cash flows
Accounts payable vs accounts recievable
Payable: What you owe
Recievable: What is owed to you
Current Assets
Assets that will be converted to cash in 1 year
ACCOUNTINF FORMULA
Assets= Liabilities+Owners Equity
Revenue
Price * Quanitity
Cost of Goods Sold
production costs for each good
or
cost of purchasing a product
Gross Profit
Revenue-cogs
Operating Expenses
Ongoing business expenses not tied to sales volume/Production
Mortgage, Rent, Salaries
Net income from operations?
Gross Profit-Operating Expenses
Net income from operations- Taxes&Interest
EBT!!!
EBITDA
Earning Before Interest Tax Depreciation Ammortization
Net income or loss
EBT-Income Tax
How to go from EBITDA to EBT
EBT= EBITDA- Interest + CCA
CCA
PLZ GET A PROPER DEFINITION
Capital Cost Allowance
Acronym for the typical structure of balance sheet
Rain
Cant
Grow
Oranges
Noah
Tell
Nancy
Revenue
-COGS
Gross profit
-Operating Expenses
Net income from Operations
-Tax
Net Income
Financial Ratio
$1 mil is a great profit for some companies while absolutely horrible for others,
Ratios used to measure diff aspects of companys performance
3 financial ratios
- Debt-to-equity
- Return on sales
- Current Ratio
Cash helper formula
Cash= cash in- cash out +non cash charges
Cash= (Liabilities + Equities) - (Non current assets + sum current assets EXCEPT CASH!)
Profit Margin
Net Profit/ Revenue
Tax
=IF(EBT>0, EBT*TAX RATE, 0)
Basic profit formula
Revenue-Costs
GST Collected
Revenue *GST rate
GST Paid
=Sum(expenses specified)*GST rate
GST Payable
GST Collected- GST Paid
Credit Card Questions
Credit Card charge * Revenue * custerms using credit card%
NOTE: if not given customers using credit card % then exclude this
WHEN CALCULATING FOR BUSINESSES OFTEN WHAT?
HAVE TO MULTIPLY YOUR EXPENSES BY % (OF CUSTOMERS USIGN CARD, OF HOUSE USED FOR BUSINESS)
How relevant is income statement
1 year
WHAT IS GST NOT
PROFIT
