Unit 9: Financial Reporting Flashcards
(29 cards)
What kind of reporting does the SEC require from Publicly trades companies?
Quarterly and annual financial reports that include balance sheet and income statement
Form 10-K: annual report
Form 10-Q: quarterly report (unaudited)
Form 8-K: newsworthy events - file within 4 days of event
Annual report to all shareholder (can use 10K)
What is a balance sheet?
Outlines Assets vs. Liabilities
How do you determine net worth?
Net worth - Assets - Liabilities
AKA: Shareholder’s Equity/Owner’s Equity
What are Current Assets?
cash, accounts receivable, inventory, prepaid expenses
What are Fixed Assets?
property, equipment (depreciated value = cost - accumulated depreciation)
What are Intangible Assets?
Formulas, brand name, trademarks
What are Current Liabilites?
accts payable, wages payable, long term debt due within 12 months notes payable, accrued taxes
What are Long-term Liabilities?
Debts, bonds, mortgages due after more than 12 months
What are companies required to include in Financial statement footnotes?
potential legal actions, accounting methods, any off-books debt
What is Financial Leverage?
The use long term debt to increase return on equity.
When does it mean if a company is highly leveraged?
High ratio of debt to equity(50% or more)
What is capital stock at par?
A liability
preferred & common stock listed at par value (IPO price)
What is capital in excess of par?
A liability
paid in surplus, excess of IPO price
What are retained earnings?
A liability
earnings not paid out in dividends
What is treasury stock?
Stock repurchased by company - increases equity, reduced net worth
What is company capitalization?
sum of long term debt and equity securities
What happens when dividends are paid out?
retained earnings go down, cash (assets) go up and liabilities go up until paid out, then assets go down and liabilities go down.
What is the Form 8-K?
Filed by Investment Company to SEC anytime a newsworthy event occurs
EX. M&A , bankruptcy, member of board resigns
Must file within 4 days of event
What is the Form 10-K?
Annual report filed by Investment Company to the SEC
comprehensive overview of business and financial conditions - includes financial statements
What is the Form 10-Q?
Quarterly report filed by Investment Company to the SEC - unaudited financial statements
What are publicly traded companies required to provide to shareholders?
Annual Reports (can use form 10-K instead)
What is the difference between cash accounting and accrual accounting?
accrual accounting- Logs the income when sale is booked
Cash accounting- Logs the income when the money is actually received
What is included on a Cash Flow Statement?
shows money from operations, financing, and investing but not accounting changes
What is included on an Income Statement?
Shows profit and loss
based on revenues and COGS (cost of goods sold )
Gross margin = Gross operating profit = Revenue - COGS (divide by revenue to get % = margin of profit )
Pre tax margin = Net operating profit = EBIT (earnings before interest and taxes) = Revenue -COGS and other operating costs (rents/utlities)
