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Entrepreneurship
Chapter 7- Preparing, Analyzing, and Forecasting Financial Statements: Quantifyi
| Term | Definition |
|---|---|
| Balance Sheet | -Presents a company's financial position at the end of a specified date. - Snapshot of the company's financial position at a point (a moment or an instant) in time. - see what a company owns as well as what it owes to other parties |
| Income Statement | is a key financial statement which reports on a company's profitability during a relatively short period of time such as the past year, month, 13 weeks, etc. The heading of the income statement informs the reader of the period covered |
| Cash Flow Statement | reports the cash generated and used during the interval specified in its heading |
| Product cost | cost of making the product |
| period cost | -selling expenses -general and administrative expenses |
| asset = liabilities + equity | basic accounting equation |
| assets | are resources that an entity owns in order to derive some future benefits |
| liabilities | are one of the claims of external parties from the entity |
| equity | reflect the residual claims or net assets of the owners of an entity |
| financial statement analysis | is the process of analyzing a company's financial statements for decision-making purposes and to understand the overall health of an organization. |
| Horizontal analysis | -Also known as trend analysis -Technique that involves the comparison of a line item (account) over a number of periods -Used for projecting financial statements |
| vertical analysis | -Is the preparation of common-size financial statements |
| balance sheet analysis | -is presented according to their relative liquidity or convertibility to CASH |
| objectives of fund flow statement analysis: | -pinpoints the mobilization and utilization of resources -highlights the financing of the general expansion -exemplifies the utilization of debt finance -portrays the relationship between the financing, investment, liquidity and dividend |
| Sales or Net Sales | For the statement of profit/loss, the base amount used is _____ |
| Total Asset | For the statement of financial position, the base amount used is ____ |
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