FINANCIAL MANAGEMENT (C214) SHORT
SUMMARIZED INFORMATION TO REMEMBER
FOR YOUR EXAM WESTERN GOVERNORS’
UNIVERSITY
, C214 Information to Remember
Recommended calculator: TI BAII
Financial 8 questions on the assessment; publicly traded companies
Statements have to file four sets of financial statements with the SEC
What are the four 1. Income statement: prepared for a period of time
financial statements
that need to be filed 2. Statement of Retained Earnings: prepared for a period of
in order? time
3. Balance Sheet: period at a point in time (only true for that
point in time)
4. Statement of Cash Flows: prepared for a period of time
Income Statement Revenues: amount generated by the sale of products and
services
Revenue Recognition principle: revenue is recognized
when product or service is delivered to the customers
Expenses: amount incurred to manufacture products
Expense Recognition principle: expenses are recognized
when they are incurred by the company (ex. Consuming
utilities)
Income: the difference between revenues and expenses
Accrual accounting method: another way to reference
revenue and expenses recognition principle
What is included in Depreciation expense
the income
statement and not Ex. The depreciation on your car; you are not paying cash
included in the for the depreciation on your car
statement of cash
flows?
Statement of Beginning RE + Net Income – Dividends = Ending RE
Retained Earnings
Net income = Margin x Sales Revenue
Dividends: Dividend payout ratio x (margin x sales
revenue)
SUMMARIZED INFORMATION TO REMEMBER
FOR YOUR EXAM WESTERN GOVERNORS’
UNIVERSITY
, C214 Information to Remember
Recommended calculator: TI BAII
Financial 8 questions on the assessment; publicly traded companies
Statements have to file four sets of financial statements with the SEC
What are the four 1. Income statement: prepared for a period of time
financial statements
that need to be filed 2. Statement of Retained Earnings: prepared for a period of
in order? time
3. Balance Sheet: period at a point in time (only true for that
point in time)
4. Statement of Cash Flows: prepared for a period of time
Income Statement Revenues: amount generated by the sale of products and
services
Revenue Recognition principle: revenue is recognized
when product or service is delivered to the customers
Expenses: amount incurred to manufacture products
Expense Recognition principle: expenses are recognized
when they are incurred by the company (ex. Consuming
utilities)
Income: the difference between revenues and expenses
Accrual accounting method: another way to reference
revenue and expenses recognition principle
What is included in Depreciation expense
the income
statement and not Ex. The depreciation on your car; you are not paying cash
included in the for the depreciation on your car
statement of cash
flows?
Statement of Beginning RE + Net Income – Dividends = Ending RE
Retained Earnings
Net income = Margin x Sales Revenue
Dividends: Dividend payout ratio x (margin x sales
revenue)
