Accounting Definitions

Accounting Definitions - Chapter 3 Income Statement The...

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Chapter 3 Income Statement The statement of profit or loss for the period comprised of net revenues less expenses for the  period. Operating Income (EBIT: earnings before interest and taxes) Profit from sales minus total operating expenses Interest expense Interest paid to the suppliers of the firm’s outstanding debt.  A firm’s interest expense is tax- deductible. Earnings before taxes Operating income minus interest expense Marginal tax rate The tax rate that would be applied to the next dollar of income. Average tax rate Taxes owed by the firm divided by the firm’s taxable income. Net income A figure representing the firm’s profit or loss for the period.  It also represents the earnings  available to the firm’s common and preferred stockholders. Balance Sheet A statement of financial position at a particular date.  The form of the statement follows the  balance sheet equation:  total assets = total liabilities + owners’ equity Current assets (gross working capital)
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This note was uploaded on 08/22/2009 for the course FIN 3310 taught by Professor Potts during the Spring '08 term at Baylor.

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Accounting Definitions - Chapter 3 Income Statement The...

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