Chapter 2 - Understanding Financial Statements, Taxes, and Cash Flows
Income Statement
SALES
(revenue)-EXPENSES
(
Cost of Goods Sold
,
Operating Expenses
(marketing, administrative)
,
Financing Costs
,
Taxes
)=
PROFIT
SALES
- Cost of Goods Sold
GROSS PROFIT
- Operating Expenses
OPERATING INCOME (EBIT)
- Interest Expense
EARNINGS BEFORE TAXES (EBT)
- Income Taxes
EARNINGS AFTER TAXES (EAT)
- Preferred Stock Dividends
-
NET INCOME AVAILABLE
TO COMMON STOCKHOLDERS
Total Assets
=Outstanding
Debt
+
Shareholders’
Equity
Assets
Current Assets
:
assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Fixed Assets
:
machinery and equipment, buildings, and land.
Other Assets
:
any asset that is not a current asset or fixed asset.
Intangible assets
,
such as patents and copyrights.
Financing
Debt Capital:
financing provided by a creditor.
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- Spring '11
- sadzd
- Balance Sheet, Free cash flows, Generally Accepted Accounting Principles, operating expenses
-
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