concept and worksheet

concept and worksheet - Chapter 6 Three types of Income...

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Chapter 6 Three types of Income measurements: Net Income Considered bottem line, but is not. Comprehensive Reflects nearly all changes to equity, other than dividends and stock issuances. Continuing income Is a measure that excludes extraordinary items, effects of accounting changes and effects from discontinued operations. Two types of Income: Operating income Measures incme from ongoing operating activities. Nonoperating income Measures items such as financing activities and discontinued operations. Income Concepts Economic income Measures the net change in sharesholders wealth. Comprehensive Permanent income Called sustainable income, or recurring. Virtual same as Core (Recurring) Stable income or expected to recur income. Our major quest in analysis. Core earnings Accounting income after removing nonrecurring items. Virtual same as Permanent
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Financials Non operating Operating Sales 14,314 Cost of goods sold 8,270 Gross profit 6,044 Other Income: Investment income 500 Gain on sale of fixed assets 100 Expenses: Selling and administrative 3,564 Research and development 1,234 Restructuring charge 200 Interest expense 525 Income before taxes 1,121 Income taxes 30% 336 Income from continuing operations 785 Gain on extinquishment of debt 28 Loss from operating discontinued segment 10 Gain from sale of discontinued segment 20 Net income 823 Foreign currency translation adjustments 82 Unrealized holding gain on available for sale securities 14 Post retirement benefits adjustment 10 Comprehensive income 929
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This note was uploaded on 02/16/2012 for the course FINA 470 taught by Professor Austin during the Fall '11 term at South Carolina.

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concept and worksheet - Chapter 6 Three types of Income...

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