Longitudinal 4- Exam 1
Statement of financial position at specific point in time
Balance sheet
what is on a balance sheet?
- assets
- liabiltiies
- owner's equity
assets listed in order of
decreasing liquidity
current assets
easily converted to cash or consumed in 1 year
current cash
Cash
Accounts receivable
Inventory
Prepaid expenses (other assets)
fixed asset
building land, etc
cannot be sold
liabiltiies listed in increasing term of
payoff time
current liabilities and accrued
Must be paid in one year
Accounts payable
,long term liabilities
Due in > 1 year
Notes loan mortage
Owner's equity
net worth or cpaital
income statement
across a time period
portion of income statment
- TS
- COGS
- gross profit
- operating expenses
- gross profit
- net profit
COGS
Value of beginning inventory + purchases - value of end inventory
gross profit =
Total sales - COGS
net profit
Gross profit - operating expenses
Direct cost
Attributable to service
, Indirect cost
Would occur even without service
Fixed
Sum of cost before you can produce first unit
Variable
Based on how much units/sessions
assets=
liability + owner equity(net worth)
Financial ratio analysis way of determining
-How well the assets of a business are being managed and controlled
-Whether a return on invested funds is satisfactory
Examine differences in financial status between periods to identify
seasonal variations
seasonality
Establish a basis for credit and negotiate for best financing terms
Borrowing
four classifications financial ratio analysis
- profitability
- efficiencey
- liquidity
- solvency
Statement of financial position at specific point in time
Balance sheet
what is on a balance sheet?
- assets
- liabiltiies
- owner's equity
assets listed in order of
decreasing liquidity
current assets
easily converted to cash or consumed in 1 year
current cash
Cash
Accounts receivable
Inventory
Prepaid expenses (other assets)
fixed asset
building land, etc
cannot be sold
liabiltiies listed in increasing term of
payoff time
current liabilities and accrued
Must be paid in one year
Accounts payable
,long term liabilities
Due in > 1 year
Notes loan mortage
Owner's equity
net worth or cpaital
income statement
across a time period
portion of income statment
- TS
- COGS
- gross profit
- operating expenses
- gross profit
- net profit
COGS
Value of beginning inventory + purchases - value of end inventory
gross profit =
Total sales - COGS
net profit
Gross profit - operating expenses
Direct cost
Attributable to service
, Indirect cost
Would occur even without service
Fixed
Sum of cost before you can produce first unit
Variable
Based on how much units/sessions
assets=
liability + owner equity(net worth)
Financial ratio analysis way of determining
-How well the assets of a business are being managed and controlled
-Whether a return on invested funds is satisfactory
Examine differences in financial status between periods to identify
seasonal variations
seasonality
Establish a basis for credit and negotiate for best financing terms
Borrowing
four classifications financial ratio analysis
- profitability
- efficiencey
- liquidity
- solvency
