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Transcript of > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that...
![Page 1: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/1.jpg)
> > > > > > > >
Understanding Financial
Statements
![Page 2: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/2.jpg)
Balance Sheet
What is a Balance Sheet?A statement that shows
– (1) How much money a company has– (2) How much money a company owes– (3) How much the company is worth (value of
company)Follows the accounting equation
Assets = Liabilities + Owner’s Equity
![Page 3: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/3.jpg)
Sample Balance
Sheet
![Page 4: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/4.jpg)
Label the Balance
Sheet
![Page 5: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/5.jpg)
Label the Balance
Sheet1. Company Name
Balance SheetDate
![Page 6: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/6.jpg)
Label the Balance
Sheet1. Company Name
Balance SheetDate
2. Total Assets – how much you have
![Page 7: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/7.jpg)
Label the Balance
Sheet1. Company Name
Balance SheetDate
2. Total Assets – how much you have
3. Total Liabilities – how much you owe
![Page 8: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/8.jpg)
Label the Balance
Sheet1. Company Name
Balance SheetDate
2. Total Assets – how much you have
3. Total Liabilities – how much you owe
4. Owner’s Equity– how much you are worth
![Page 9: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/9.jpg)
You make $400 (after taxes) and you owe $275 in bills. What is your worth?
$400 (asset) - $275 (liability)= $125 (worth)
C heck Point….
![Page 10: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/10.jpg)
Income
Statement
What is an Income Statement?
A statement that shows a company’s profit.How much was sold or made? ( revenue)How much was spent? (expense)How much is left over? (net income/profit)
Revenue – Expenses = Net Income/Loss
![Page 11: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/11.jpg)
Sample Income
Statement
![Page 12: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/12.jpg)
Label the Income
Statement1. Company Name
Income StatementDate
![Page 13: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/13.jpg)
Sample Income
Statement1. Company Name
Income StatementDate
2. Total Revenue - how much was sold
![Page 14: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/14.jpg)
Sample Income
Statement1. Company Name
Income StatementDate
2. Total Revenue - how much was sold
3. Total Expenses - how much was spent
![Page 15: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/15.jpg)
Sample Income
Statement1. Company Name
Income StatementDate
2. Total Revenue - how much was sold
3. Total Expenses - how much was spent 4. Net
Income/Loss- how much profit
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You have $5000 in sales
Your company had $1200 in expenses
Did you have a Net Income or Loss? What was the amount?
Revenue $5000 – Expenses $1200 = Net Income $3800
C heck Point….
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Look at the Balance Sheet and Income Statements for Companies 1, 2 and 3.
Answer the questions with the person next to you.
Evaluating Financial
Statements
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Review….
• What accounts would you find listed on the balance sheet?
• Assets• Liabilities• Owner’s Equity
![Page 19: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/19.jpg)
Review….
• What is the term used for how much you owe?
• Liability
![Page 20: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/20.jpg)
Review….
• How do you calculate how much you are worth?
• Assets – Liabilities = Owner’s Equity (worth)
![Page 21: > > > > Understanding Financial Statements. Balance Sheet What is a Balance Sheet? A statement that shows –(1) How much money a company has –(2) How much.](https://reader036.fdocuments.us/reader036/viewer/2022062516/56649dce5503460f94ac200e/html5/thumbnails/21.jpg)
Review….
• What financial statement shows how much profit you made and how is this calculated?
• Income Statement• Revenue - Expenses