note - BasicBusinessModel o Firm o o...

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Basic Business Model o Firm o Separate from individual o Sole-propiorship, partnership o Where to get money? Money, investors (share, equity), financial institution (interest) o What do you do? Buy assets Produce goods Sell to customers o Final = Earn $ profits  o Reinvestment back to firm Generally Accepted Accounting Principles (GAAP) o Different in each region  o Basic Set of Financial Statements Balance Sheet (aka. Statement of Financial condition) Snapshot – valid at a single point in time o Begin and End Assets = what firm owns o Provide benefit now or future; economically Liabilities = what firm owes Equity = amount owners own Assets – Liabilities = Equity Assets = Liabilities + Equity Income Statement (aka. Statement of Operations, P&L) 
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Unformatted text preview: Retain Earning (RE) in Balance sheet Summary of revenues and expenses over an accounting period (like movie) Revenues – Expenses = Net Income Connects two balance sheet Statement of Comprehensive Income More info than Income statement Statement of Cash Flows Summary of cash inflows and outflows over an accounting period classified as o Operating o Investing o Financing Statement of Shareholders’ Equity Notes to Financial Statements - *** important*** Elaborate where the number come from Report to SEC 10-K = annual report 10-Q = Quarterly report...
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  • Spring '14
  • Shareholders’ Equity, basic business model

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