BSM 100 Lecture Notes - Lecture 10: Retained Earnings, Balance Sheet, Financial Statement
23 Nov 2017
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Document Summary
Financial accounting - branch of accounting that addresses the needs of. Corporations with publicly held stock must publish annual reports with all statements. Shows financial position of the company at a point in time. Balance sheet shows results, what company owns (assets), what it owes (liabilities), and what is left over for the shareholder"s equity. Assets: cash, finished goods inventory, accounts receivable. Liabilities and shareholder"s equity: source of funds, debt, Shareholder"s equity: common shares, retained earnings (profits after paying all expenses) Summarizes a firm"s operations over a given period of time in terms of profit and loss. Less cost of goods sold (direct cost of wages and raw materials in production. Minus operating expenses (day to day expenses, expenses that don"t change with sales volume) Equals operating income (ebit earnings before interest and taxes) Equals net income (profit after tax or bottom line) Equals retained earnings (goes to balance sheet)
