Introduction into Finance 340

Income Statement:

Sales Revenue

-Cost of Good Sold

Gross Profit Margin

-Operating expense

Operating Profit/earnings before income taxes

-Interest expense

Earnings before Tax

-Taxes

Net Income R/E or dividends

Retained Earnings:

Beginning R/E

net income

-dividends

Ending R/E

*accumulates, therefore not all available in cash because ending r/e is already supporting other assets

Balance Sheet: Assets Liabilities & Equity

Assets: What the firm owns

Liabilities: How the assets are financed

Current Assets (short term, 1 year)

-cash

-inventory

-accounts receiveable

-marketable securities

-prepaid expenses

Fixed Assets (Life 1year)

-land (tangible)

-vehicles (tangible)

-equipment (depreciate)

-buildings (depreciate)

-patents...