ALTS

The SEC(Security and Exchange Commission) authorizes the FASB (Financial Accounting Standards Board) to determine?

GAAP (Generally Accepted Accounting Principles)

Income Statement

Financial performance for period of time (expenses, revenue, gain, loss)

Revenue

Money generated from sales

COGS

Direct cost of producing

Expenses

Operational costs

Net Income

Money remaining

Top-line to Bottom-line formula

Revenue-COGS=Gross Profit-Operating Expenses=Operating Income-Interest and Taxes=Net Income

EBIT

Earnings before interest and taxes

What is not on an income statement?

Equity(dividends), liabilities(debt), or capital expenditures

Accrual Accounting

based on when revenues/expenses when they actually happen

Cash based Accounting

based on when cash is paid for revenue/expenses

Cash Flow

Actual cash generated and spent over period of time

Operating Cash Flow (CFO)

net income, working capital, adjustments (non-cash expenses)

Investing Cash Flow (CFI)

assets and investments

Financing Cash Flow (CFF)

debt, equity, and dividends

Balance Sheet

Financial position at point in time

Assets=

Liabilities+Equity

Liabilities

what you owe to other parties

Shareholder’s equity

Company owner capital after debts paid

Current Assets

1 year or less

Non Current Assets

More than 1 year

Working Capital=

Current assets-Current liabilities