Income Statements and Balance Sheets Flashcards
1
Q
What does an income statement do?
A
- Measure business performance by looking at income and costs over a given period (usually a year).
- Show the level of profit or loss made by the business.
2
Q
What are the components that make up the income statement?
A
- Revenue
- Cost of sales
- Gross profit
- Overheads
- Operating profit
- Net profit
3
Q
What elements make up the left hand side of the balance sheet?
A
- Non-current assets
- Current assets
- Current liabilities
- Non-current liabilities
4
Q
What elements make up the right hand side of a balance sheet?
A
- Share capital
- Profit
5
Q
On a balance sheet, what are fixed assets?
A
- Things that are of value within the business.
6
Q
What happens to fixed assets over time?
A
- They reduce in value.
7
Q
How long may fixed assets take to sell with regards to balance sheet?
A
- more than a year.
8
Q
What is working capital?
A
- The money that the business has - more liquidity means it has more working capital.
9
Q
How is total assets calculated?
A
Fixed assets (or non-current assets) + working capital
10
Q
What are shareholder funds?
A
Money invested into the business by the shareholders.
