{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Eng 111- Week 2 Discussion

Eng 111- Week 2 Discussion - Discussion Sheet 2 Week 2...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Discussion Sheet 2 10/07/2011 Week 2: Interpreting Accounting Statements TA: Ravichandran Ramakrishnan Key Principal : Accounting rules often lead to a mismatch between the true cash flow of a firm and its accounting revenue. For example revenue is recognized when a good is sold. That means something sold on credit counts as a sale despite no cash being received. Thus to get a better understanding of a company’s statements we need to calculate the cash flow (the actual benefit to investors.) Example Corp. Income Statement Operating Revenues 20 0 Cost of Goods Sold 75 Selling, General, and Admin Costs 45 Depreciation 50 Other Income 40 Earnings Before Interest and Taxes 70 Interest Expense 25 Taxes 15 Net Income 30 Example Corp. Balance Sheet Assets 2010 2009 Current Assets 50 40 Fixed Assets 200 190 Other Assets 30 30 Total Assets 280 260 Liabilities Current Liabilities 20 10 Long-Term Liabilities 100 90 Total Liabilities 120 100 Equity Common Stock 100 100 Retained Earnings 60 60 Total Equity 160
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern