Lecture02 - Lecture 2 Overview of Financial Statements...

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1 Lecture 2 Overview of Financial Statements Balance Sheet
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2 Reporting Business Activities Obtain Financing Issue debt and stock Make Investments Purchase land, bldgs, inventory, etc. Conduct Operations Sell goods and services to customers Pay employees, suppliers, creditors Balance Sheet Balance Sheet Assets Income Statement Net income
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3 Balance Sheet • Describes the financial position of the firm at a given point in time • Assets are – resources owned or controlled by the firm – Future economic benefits or rights that are owned or controlled by the firm • Liabilities are – a source of claim against the resources of the firm – Fixed and unavoidable obligations to transfer cash or some other good or service to an outside party at some future time Assets = Liabilities + Shareholders’ Equity
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4 Balance Sheet – Cont’d • Shareholders’ Equity – another source of and claim against the resources of the firm • Shareholders' equity represents amounts invested in the firm by it’s owners, either: a) directly, when they purchase of shares from the company; b) indirectly, when they allow the firm to retain its earnings rather than requiring that it paying them out in the form of dividends.
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5 What does Consolidated mean? Why this date? Why is this an asset? What must this be equal to? Why is this an asset?
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6 Why are these liabilities? What must this be equal to? How much is the employee related benefits liability?
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7
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8 Income Statement • Describes the financial results of the firm’s operations over a period of time Revenues
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This note was uploaded on 06/28/2009 for the course ACCT 101 taught by Professor Armstrong during the Summer '09 term at UPenn.

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Lecture02 - Lecture 2 Overview of Financial Statements...

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