3.5.1 Interpretation of Financial statements Flashcards
Define what a statement of comprehensive income is?
shows the businesses income and expenditure
What are the 9 things that Statement of comprehensive income shows?
Revenue Cost of sales Gross profit Selling expenses Overhead Operating profit Finance costs Profit of the year Taxes
Why are shareholders interested in comprehensive income statement?
they can gauge the growth of the business
Why are managers interested in the comprehensive income statement?
they can plan targets for annual growth
Why are employees interested in the comprehensive income statement?
whether or when they can ask for a pay rise
Why are suppliers in the comprehensive interested income statement?
see whether they want to do business with them or not
Why is the government interested income statement?
how much tax they need to pay
What is a statement of financial position?
shows assets, liabilities and capital - snapshot of finances of the business at that time
What are non current assets?
4 examples?
long term investments goodwill intangible assets equipment/property investments
What are current assets?
3 examples?
Cash/other assets expected to be cash in year
inventories
other receivables
cash in bank
What are current liabilities?
4 examples?
due to be paid to creditors in that year borrowings other payables dividend payments current tax
What examples of non-current liabilities? 2
other loans and borrowings
retirement and pensions
What is net assets?
value of all assets minus value of all liabilities
What is equity?
amount of money owed to shareholders
What is share capital?
amount to be paid to shareholders
