Module 7 - Financial Statements, Cost Estimating Flashcards
(38 cards)
What are the 3 main financial statements?
Balance Sheet
Income Statements
Cash Flow Statements
What does a balance sheet show?
Assets (Equipment, bldgs, inventory)
Liabilities (payroll, loans, rent)
Owners Equity (stock, paid-in capital, retained earnings)
Current vs Non-Current Assets
Current: will/can be sold within a year
Non-Current: will not/cannot be sold within a year
Current vs Long-Term Liabilities
Current: due/will be paid within a year (accounts payable, accrued expenses)
Long-Term: Bonds, Loans
What is Owner’s Equity?
The worth of the company
Paid-In capital (money from seeking stocks)
Retained earnings: Cumulative Net Income of firm minus total dividends paid
What is net working capital?
Current Assets - Current Liabilities
What are the limitations of balance sheets?
- Assets recorded with historical value
- Only has assets that can be expressed in money
- Owners Equity < Market Value
What is an income sheet?
Measures profit of company over a time period (net income/loss)
What’s included in an income statement?
Revenue - Expenses = Taxable Income
What’s included in Revenues?
Money received for delivering goods/services (gross sales - returns)
What’s included in expenses?
Cost of goods sold, operating expenses, extra expenses (interest in loans, currency charges, depreciation)
What is income tax calculated with?
Taxable income x Tax Rate
What is a cash flow statement?
Shows company’s use of cash over reporting period (operations, investment activities, financing activities)
What are the classification in cash flow statements?
Op Acts: transactions and events that enter into net income
Investing: purchase and sale of securities, property, plant, equipment, other non-resale assets
Financing/ transactions of resources from or repaid to owners and creditors
Asset, Liability, or Equity?
Cash, Equipment, Retained Earnings, Accounts Payable, Long Tern investments, Building, Long Term debt, Net deficit, pension benefits
Asset, Asset, Equity, Liability, Asset, Asset, Liability, Equity, Liability
Where to find the following Info?
Company’s profit during fiscal period
Cash spent and generated
Financial position
Income statement
Cash Flow Statement
Balance Sheet
What is the debt ratio?
Describes relationship between liabilities and assets (ratio = 1 means all assets financed with debt)
What is debt management?
Measure of companies ability to meet financing commitments - analyzing earnings before interest and taxes to see if interest can be paid
What is the current ratio? The quick ratio?
Current ratio asks if liabilities are rising faster than assets
Quick ratio asks if company could pay liabilities if they were due now
What is inventory turnover?
How many times per year was inventory sold and replaced
What is Days Sales Outstanding?
What the average collection period (how long after a sale does it take to get paid)
What is total assets turnover?
How effectively company is using its assets
What is the return on assets?
How successful company is at using assets to generate profit
Return on Equity
How much income is earned per dollar of shareholder investment
