Business Administration - Management FIS403 Lecture Notes - Lecture 2: Retained Earnings
Depletion
relates to depletion of a resource such as gold, silver, oil –typically
used only in mining and oil industry
Amortization
relates to non-physical property such as intellectual property, goodwill,
anything that is intangible
Remember that land is not depreciated
The Balance Sheet
The Balance Sheet shows the financial picture of a company as at
a single point in time.
Represents a snapshot of the company at one particular point in
time, of “what the company has, and how they got it”.
Shows what the company ‘owns’ in the form of assets, and what it
‘owes’ in the form of liabilities.
Similar to a Net Worth Statement for a person
Net Worth = what you own minus what you owe
The Balance Sheet
Assets = Liabilities + Shareholders’ Equity
Tells Us
What the company owns (its assets) =
How the company financed these assets (debt or equity)
Or
Shareholders’ Equity = Assets – Liabilities
The Balance Sheet
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Document Summary
Depletion relates to depletion of a resource such as gold, silver, oil typically used only in mining and oil industry. Amortization relates to non-physical property such as intellectual property, goodwill, anything that is intangible. The balance sheet shows the financial picture of a company as at a single point in time. Represents a snapshot of the company at one particular point in time, of what the company has, and how they got it . Shows what the company owns" in the form of assets, and what it. Similar to a net worth statement for a person. Net worth = what you own minus what you owe. How the company financed these assets (debt or equity) Shows extent to which profits are distributed to shareholders or retained in the company. Retained earnings statement (000s) for the year ending dec. 31, 20xx. We paid to preferred, ,900 to common. Earnings generated by company for each share.