COMMERCE 1AA3 Lecture Notes - Lecture 3: Retained Earnings, Current Asset, Net Income
6 Mar 2017
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Income statements are for a period of time. Costs of good sold should be the rst expense. Income from operations = ebit = earnings before interest and tax. Net income is also known as net earnings. Income statements measure nancial performance of a company. Retained earnings are for a period of time. Retained earnings can be negative, especially for start-ups. Dividends are distributions of income to the owners or shareholders. Dividends are known as contra equity account (it hurts a company"s shareholder"s equity) One way to make money on stock is to make money on dividends, the other way is to sell a share on a higher price than it was purchased on. An asset is supposed to give a future bene t. A current asset is whatever will be converted to cash or consumed within one operating cycle or year (whatever is longer). A long term asset is something that will be consumed after that.
